What’s wrong with FTX and Alameda?

With the crypto markets falling in 2022, many companies faced a liquidity crisis and had to file for bankruptcy. The crypto industry has been shaken by concerns that FTX and venture capital firm Alameda may face a similar liquidity crisis.

In the crypto sector, where many companies have problems, the FTX exchange came to the fore this year with its rescue plans by investing in companies exposed to the liquidity crisis through Alameda. In the current situation, rumors that Alameda may also enter into a liquidity crisis have begun to disturb the market. This seems to be due to the fact that the company has too many FTX exchange native tokens, FTT. Recent reports have shown that of Alameda’s $14.6 billion asset, $3.55 billion consists of FTT tokens.

The development that made the current situation more unsettling was the announcement of Binance CEO Changpeng Zhao that the exchange will gradually sell all its FTT assets. However, Etherscan data showed that $584 million of FTT was transferred to the Binance exchange. While this figure corresponds to 17% of FTT tokens in circulation, their sales are thought to have a significant impact on the FTT market.

In his statement on the subject, Zhao claimed that the sales will be made in a way that will affect the market as little as possible. Binance CEO also said that they have no intention of harming the rival crypto exchange with their decision. While these developments were taking place, Alameda Research CEO Caroline Ellison made an offer of $22 per token to purchase FTT tokens from Binance. This move is interpreted as making such an offer because the company does not want the FTT token price to drop below $22.

In the midst of this development that emerged over the weekend, many commentators shared their concerns about FTX. Some crypto commentators, who think that the major crypto exchange is at risk of bankruptcy, think that Binance’s recent FTT transfer fueled the crisis.

FTX CEO Sam Bankman-Fried said on Twitter that FTX and its subsidiaries are subject to a high level of supervision and its financial structure is strong. Underlining that the platform’s shooting processes continue smoothly, Banktan Fried said that FTX users do not need to worry.

Reports after Binance’s $584 million FTT token transfer also showed some big exits. Among them, $109.8 million worth of crypto money was transferred from FTX to the Nexo platform. On the other hand, Jump Trading has withdrawn 40.4 million USDC from the FTX exchange.