The ongoing encounter between crypto exchange behemoths Binance and FTX is raging on. The loser at the moment appears to be the latter, as its FTT token price is tanking. Nevertheless, Binance claims it doesn’t want a fight.
The native token for the FTX exchange has tanked over 30% over the past few hours. FTT had stabilized around the $22 range for most of yesterday. However, it began to drop sharply during the Tuesday morning Asian trading session.
At the time of writing, FTT had fallen 32% in just four hours to bottom out at around $15, according to TradingView. It has now dropped 81% from its September 2021 all-time high of just over $84.
FTX Token (FTT) Knocked Down, But Binance Not Fighting
Chinese media reporter Colin Wu noted the move. He reported that 1.9 million FTT tokens worth around $44 million were transferred from the Genesis OTC Desk to FTX 12 hours ago.
He also stated that Binance had denied selling. CEO Changpeng ‘CZ’ Zhao sparked this latest crypto quarrel by announcing the closing of the firm’s FTT position.
He announced this on Nov. 6, as reported by BeInCrypto. This caused a wave of insolvency speculation regarding FTX and Alameda, both founded by Sam Bankman-Fried.
At the time, CZ said it would take months to offload the FTT tokens due to market conditions and liquidity. In his most recent tweet on the subject on Nov. 8, he said:
“Funny memes, media & some people tried to color this as a “fight.” Sorry to disappoint, but I spend my energy building, not fighting.”
The Story So Far
Founder of W3T Inc., Alex Valaitis, posted some of the histories between the two crypto billionaires on Nov. 8.
Binance invested in FTX when it was launched back in 2019, however, the SBF-founded exchange grew very quickly. In 2021, Binance chose to divest from FTX during its $900 million funding round.
SBF knows that to become the top dog in crypto, he needs to win over regulators in the United States. He is a huge political donor and has pledged almost $40 million to pro-crypto Democrat campaigns and candidates this electoral cycle.
Valaitis postulated that two events opened up FTX and SBF to attack by Binance and CZ. Bankman-Fried’s proposals of heavy-handed regulations made him an easy target.
Fears over Alameda’s balance sheet being dominated by FTT tokens that the firm mints itself sparked the sale, or so it appears. Valaitis said that CZ’s “offensive” had two impacts:
“1. It helped fuel the FUD narratives around FTX insolvency & it further framed FTX as being against crypto.
- It would allow Binance to make a material impact on the $FTT price by selling their tokens.”
On Nov. 7, CZ virtually confirmed that it was an attack of sorts with this tweet:
With FTT token prices currently collapsing, it seems that the crypto contagion of 2022 is far from over. The wider market is also reacting with a 6% loss in total market cap since the same time yesterday.
This will only play into the hands of global regulators, making everyone a loser in the end.