Key Insights:
- Binance dumps its entire FTX token (FTT) holdings.
- The CEO said the move is post-exit risk management and a lesson from the LUNA crash.
- Industry players opined that it is targeted against a competitor, but Binance has debunked this speculation.
Binance, a crypto exchange, reveals that it is dumping all its FTX token (FTT) holdings. The chief executive officer of Binance, Changpeng Zhao, confirmed the statement.
Understanding FTX Tokens (FTT)
FTX tokens are utility tokens that provide access to FTX trading platforms, features, and all services. FTT token is the native token of the FTX ecosystem. The FTX ecosystem builds the utility and incentivizes users to hold the token in their portfolio and use them.
Similarly, FTX Token, or FTT, is a cryptocurrency for traders. These utility tokens have (at most)30,000 total addresses holding them.
Interestingly, FTX tokens were launched three years ago and have grown to a market cap of over $3B
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FTX tokens are built to enable traders to save on their trading fees and get discounts when they transact with this utility token.
Binance Dumps Its FTX Tokens
Binance CEO Changpeng Zhao tweeted that his exchange liquidates all of the FTX tokens (FTT) on its books.
He said Binance was an early investor in FTX, and last year, it received $2.1 billion worth of Binance stablecoin. Part of this fund includes FTT from existing FTX equity.
Furthermore, Binance has held the tokens for a long time, and it was high time to let them go. Changpeng Zhao said, “ We typically hold tokens for the long term. And we have held on to this token for this long.”
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The statement shows that the decision to liquidate the entire FTX will salvage the situation and minimize investors’ loss. He said, “We will try to do so in a way that minimizes market impact.”
Right now, the market condition is bad for investors; the price values of tokens continue to drop. Due to the limited liquidity, we expect the dump to take a few months.
However, some industry players believe that the entire liquidation of its FTX is a move against Binance’s competitor. Changpeng Zhao has denied this speculation.
He said, “ regarding any speculation as to whether this is a move against a competitor, it is not.”
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He, however, added that “… we won’t support people who lobby against other industry players behind their backs. Onwards”
Conclusion
Binance’s decision to dump all its FTX tokens comes as a surprise to industry players and investors. The CEO attributes the dump to “post-exit risk management and learning from LUNA (crash).
Furthermore, the CEO says the move hurts, but it is in the interest of their users and will always encourage collaboration between industry players. It is, therefore, not a move against any competitor as widely speculated.
