Here's What's Happening With FTX and Why is It Selling Millions Worth of Stablecoins
The drama around FTX and its underlying token FTT is gaining more momentum in the cryptocurrency community as the trading activity of one of the biggest exchanges in the world looks even more suspicious than a few days ago.
It begins with Binance
A few days ago, the Binance CEO Changpeng Zhao stated that they have received $2.1 billion in BUSD and FTT token after becoming one of the early investors in FTX, and their plan is to sell those digital holdings due to SBF's unethical actions. Their plan was to distribute $600 million worth of assets on the open market in the next 1-2 months.
0x4c8C (Alameda)transfer a large amount of stablecoins to 0xf233 and then transfer a large amount of stablecoins from gate, huobi, okx, kucoin to the addresses and send them to 0x2faf (FTX hot wallet) to deal with withdrawals. Picture by @maid_crypto and @lianyanshe — Wu Blockchain (@WuBlockchain) November 7, 2022
Alameda Research lead Caroline Elison publicly messaged CZ and told him to sell all of their FTT holdings for $22 in order to negate the negative effect on the asset's price. This is where the story begins.
Massive outflows and self bailout
In the last 24 hours, a large amount of stablecoins from wallets on Huobi, Okx, Kucoin and other exchanges has been moved toward the exchange. The most likely reason is to deal with massive withdrawals that have been caused after Binance declared that it will sell its FTT holdings.
Technically, the massive run from FTX exchange is beneficial for Binance as it remains one of the biggest and most popular exchanges in the industry. Almost half a billion dollars has already flowed off the exchange. Since traders and investors have to use some platform for operating on the market, Binance will most likely be their choice.
At press time, FTX faced no issues with liquidity or existing debt, meaning that Binance's selling activity should not harm regular investors.Source