FTT tokens were first given to Binance as part of its last year’s exit from Sam Bankman-exchange. Fried’s However, it was only able to sell off a tiny portion.
5% of the whole FTT supply, now only worth $65 million, was all that Binance was left with despite the caustic memes that inundated Crypto Twitter when it first said it would and then wouldn’t acquire FTX.
The native utility token for the FTX exchange, or FTT, offers holders reduced trading fees. It operates similarly to a consumer loyalty program. The discount a user receives on their FTX transactions increases with the amount they hold. At least, that is how things used to be.
Decrypt was informed by a source with knowledge of Binance’s investigation into the FTX transaction that the exchange sold relatively little of its FTT before declaring its withdrawal from the FTX trade. When Binance first raised concerns by relocating the FTT on Saturday, its value was $580 million. Today, it is only worth $89 million.
Last Monday, Coindesk revealed that at least $5 billion of Alameda Research’s $14 billion balance sheet held FTT, which spelled trouble for FTX. Sam Bankman-Fried, CEO of FTX, established and owns both FTX and Alameda, although he has always insisted that the two organizations are distinct.
Following Binance’s decision to start selling its FTT holdings in response to the news, a flurry of regular traders and investors tried to do the same. The run caused a liquidity bottleneck for FTX that it was eventually unable to recover from, tanking the price of FTT in the process.
Binance ended up having a sizable FTT holding as a result of FTX’s usage of stablecoins and FTT to buy out Binance’s equities last year. According to the person acquainted with the transaction, Binance chose to sell its ownership share as a result of several heated arguments and worries around the affiliation of its rival with Alameda Research.
According to Etherscan, 17 million FTT, valued almost $65 million at the time of writing, are still present in the wallet where Binance’s FTX tokens were moved. A 5% stake in the whole FTT supply is represented by Binance’s holding.
FTT’s price has decreased by 85% in the last week, from $24.39 to $3.80, according to CoinGecko.
The day after Binance CEO Changpeng Zhao stated that the exchange was selling its FTT, the token, which typically does between $50 million and $100 million in daily turnover, soared to $1.6 billion in volume. When Binance declared that the transaction was off, it increased once again, reaching $4.4 billion of volume on Wednesday.
