FTX's founder dismisses balance sheet concerns as 'false rumors'

By Hannah Lang and Elizabeth Howcroft

LONDON -Sam Bankman-Fried, the billionaire founding father of crypto trade FTX, sought to reassure crypto buyers on Monday after a rival trade, Binance, stated it will liquidate its holdings of FTX‘s native token.

Binance’s CEO, Changpeng Zhao, stated in a sequence of tweets on Sunday that his agency would promote its holdings of the FTX token “resulting from current revelations which have come to mild.” Zhao didn't specify which revelations he was referring to or how a lot of the token Binance held.

“A competitor is making an attempt to go after us with false rumors,” FTX‘s Bankman-Fried stated in a sequence of tweets on Monday. “FTX is ok. Belongings are high-quality.”

Bankman-Fried stated in his tweets that FTX retains “audited financials” and is “extremely regulated”. He didn't initially specify which competitor he was referring to, however tagged Zhao in a later tweet, saying “I’d like it, @cz_binance, if we may work collectively for the ecosystem.”

Crypto fans had raised questions on Twitter final week about FTX‘s token, following a report from crypto information web site CoinDesk a few leaked steadiness sheet from Alameda Analysis, a crypto buying and selling agency based by Bankman-Fried that maintains shut ties with FTX.

In line with CoinDesk’s report, a lot of Alameda’s $14.6 billion in belongings are held in FTX‘s token, which is named FTT. Reuters was unable to independently confirm the accuracy of the report or the origin of the leaked steadiness sheet.

Because the CoinDesk report on Nov. 2, FTX‘s token has shed round $400 million from its market cap as merchants offered the token. It's buying and selling close to its lowest since February final 12 months, based on CoinGecko knowledge.

Alameda CEO Caroline Ellison additionally stated in a tweet that the “steadiness sheet information which has been circulating lately” solely confirmed a subset of Alameda’s company entities. The agency has greater than $10 billion in belongings that aren't mirrored within the CoinDesk report, she stated.

Crypto buyers have been on edge following a rocky summer season, which noticed token costs plunge as rising rates of interest and a broader monetary market downturn prompted buyers to ditch riskier belongings.

Mainstays within the business like Singapore-based crypto hedge fund Three Arrows Capital and crypto lenders Celsius Community and Voyager Digital have filed for chapter. FTX gained a bid in September to purchase the belongings of Voyager, and Bankman-Fried has stated his trade is working to return cash to Voyager clients.

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The general public disagreement reveals stress between the 2 billionaire founders of main crypto exchanges.

In a single tweet on Sunday, Zhao sought to dismiss hypothesis that the choice to promote the token was resulting from competitors. “Relating to any hypothesis as as to whether it is a transfer in opposition to a competitor, it's not,” he stated.

However in a tweet afterward Sunday, Zhao stated: “We gained’t assist individuals who foyer in opposition to different business gamers behind their backs,” with out giving additional rationalization.

Bankman-Fried has been one of many largest particular person political donors in the US main as much as the Tuesday midterm elections, contributing greater than $39 million to campaigns within the present cycle.

A lot of the cash he has donated has gone to Democrats, though he has additionally supported Republicans like Sen. John Boozman, who is about to be the highest Republican on the Senate Agriculture Committee — which has jurisdiction over the U.S. Commodities Futures Buying and selling Fee — if Republicans retake management of the Senate.

Zhao additionally stated in Sunday’s tweets that his liquidation of FTX‘s token was “post-exit danger administration, studying from LUNA“ – a reference to the collapse of a so-called stablecoin TerraUSD and a linked token, Luna, in Could this 12 months, which noticed holders collectively lose $42 billion and despatched shockwaves by crypto markets.

With a market cap of round $3 billion, FTX‘s token ranks because the twenty eighth largest cryptocurrency, based on CoinGecko.