FTX’s ETH Reserves Drop to the Lowest Level Since November 2020 After Binance Begins Dumping all FTX Tokens on its Books

FTX’s ETH Reserves Drop to the Lowest Level Since November 2020 After Binance Begins Dumping all FTX Tokens on its Books

  • The reserves of FTX Ethereum (ETH) have plummeted to their lowest since November 2020.
  • FTX has been receiving funds from Alameda Research in the form of Ethereum and stablecoins.
  • The latest development coincides with Binance CEO CZ’s announcement that they will dump FTX FTT tokens.
  • CZ defended the move, saying it was not an attack on a competitor.
  • The market is increasingly concerned that this may cause a death spiral similar to Terra-Luna’s in May.

As per emerging indications from CryptoQuant, FTX Ethereum (ETH) reserves have plummeted to their lowest level since November 2020. The report indicates that the ETH reserves went down by almost 300,000 in two days. Currently, FTX ETH reserves remain at 108,246.43. 

In response, Nansen data shows how 26,600 ETH were sent from Alameda to FTX—leaving its remaining balance of 9,325 ETH.

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Further, Alameda research has sent out $16.67M worth of stablecoins ($MIM, $USDT, and $USDC) to FTX. Some say it’s an act of “emergency collateralization.”

It is worth noting that crypto billionaire Sam Bankman-Fried has holdings in both Alameda Research and FTX exchange. The latest development coincides with Binance’s announcement that they will dump FTX FTT tokens.

FTX Could Suffer a Huge Crisis if Binance Sells its FTT Holding

Last night, Binance CEO Changpeng Zhao (CZ) announced Binance’s desire to sell FTT tokens on its balance sheet, arguing that the exchange wouldn’t support “people who lobby against other industry players.”

Ellison submitted that Alameda has more than $10 billion in assets in its reserves. He established that the figures were not included in the reports that emanated. FTT currently trades at $22.23, down by more than 15% from its 48h high of $25.78.

On the Flipside

  • The news about possible insolvency does not bother Sam Bankman-Fried, as he thinks the recent news is based on “false rumours” and affirmed that FTX has enough funds to cover all the client’s holdings.

Why You Should Care

There is a possibility that the recent development may lead to yet another death spiral, similar to the Luna fiasco last May. Just as a recession is on the horizon, this may bring down the entire crypto market.

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