Binance Said It Would Liquidate Its Remaining FTT Holdings

Binance chief executive Changpeng Zhao announced on November 6, 2022 that the exchange would liquidate the FTT tokens remaining on its books, bringing a major holder into the growing dispute over the financial relationship between FTX and Alameda Research.

Zhao said Binance had received roughly $2.1 billion in BUSD and FTT when it exited an earlier equity investment in FTX. That figure described the combined value received during the prior transaction; it was not a disclosure of how much FTT Binance still held or intended to sell on November 6. Zhao said the disposal would be managed to reduce market impact and could take several months.

The announcement mattered because FTT was not merely another token in Binance’s portfolio. It was issued by rival exchange FTX, provided benefits to users of that platform and appeared prominently on the balance sheet of Alameda, the trading firm closely associated with FTX founder Sam Bankman-Fried.

A disputed balance-sheet snapshot

The confrontation followed CoinDesk’s November 2 report on a private Alameda balance sheet dated June 30, 2022. The document reportedly listed $14.6 billion of assets, including $3.66 billion of unlocked FTT and $2.16 billion of FTT collateral. It also listed approximately $8 billion of liabilities, dominated by $7.4 billion of loans.

Those numbers came from a leaked, months-old document reviewed by reporters. They were not an audited, consolidated statement of Alameda, FTX or their related entities, and they did not establish either company’s financial condition on November 6.

Alameda chief executive Caroline Ellison disputed the completeness of the snapshot. In a November 6 statement, she said the document covered only a subset of Alameda entities, claimed that more than $10 billion of additional assets were omitted, and said the firm had undisclosed hedges and had repaid most outstanding loans. Alameda did not publish supporting schedules, asset details or a current liability reconciliation, leaving those assurances unverified on the event date.

Alameda offered a $22 exit

Ellison then publicly offered to buy Binance’s FTT holdings for $22 per token, describing the proposal as a way to minimize market impact. The offer supplied a specific price but disclosed no quantity, settlement asset, deadline or evidence that Binance accepted it. No completed over-the-counter transaction was announced on November 6.

The exchange illustrated the structural risk that traders were beginning to price. If a trading firm’s reported assets and collateral were materially concentrated in a token issued by an affiliated exchange, a large holder’s planned sale could affect both the token’s market price and perceptions of the balance sheet relying on it. That was a risk interpretation, not proof that Alameda was insolvent or that Binance’s announcement alone caused subsequent trading.

The event-day market record

CoinDesk reported that FTT fell 14% over a rolling 24-hour period to $22.02 before rebounding to $23.03 by its November 6 update at 18:10 UTC, citing CoinMarketCap. These were aggregated, continuously changing market observations rather than a single-exchange closing price. CoinDesk did not specify the constituent venues or the precise start and end timestamps of CoinMarketCap’s rolling window, so the figures cannot establish a venue-specific return or isolate the announcement’s effect.

What could be established on November 6 was narrower: Binance intended to exit its remaining FTT position; Alameda contested the balance-sheet narrative and offered a $22 purchase; and neither side disclosed enough information to measure Binance’s prospective sale or Alameda’s capacity to complete the offer.

Later context, kept separate

FTX filed for Chapter 11 protection on November 11, 2022. A Commodity Futures Trading Commission complaint filed on December 13 later alleged that Alameda personnel began freeing capital for FTT purchases after the November 6 exchange and that withdrawal pressure intensified. Those were later allegations and outcomes, not facts available to establish FTX’s condition on November 6.