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OKX’s founder, Star Xu, has commented on the dispute between Binance and FTX’s founders, which resulted in a sell-off of FTX’s native token, FTT.
Nobody in the sector will gain if FTX becomes another LUNA, the failed native token of the Do Kwon-founded blockchain, which wiped away an estimated $60 billion. This is because customers and regulators would lose faith in the crypto business.
“If unfortunately, FTX becomes another LUNA, nobody in the industry can benefit from the accident, including Binance. Both customers and regulators will lose some confidence about the whole industry.” Xu wrote.
His comment follows CZ’s announcement on November 6 that Binance will sell all outstanding FTT tokens. He said liquidation will occur over many months and should not be interpreted as Binance targeting its rival but as a post-exit risk management approach.
However, SBF said that a rival is spreading false rumours about FTX. He noted that FTX was strictly regulated and had sufficient funds to support all customers’ holdings. He was eager to collaborate with CZ for the ecosystem’s benefit.
Binance and FTX have achieved a ceasefire, as Binance has signed a “non-binding” agreement to buy FTX, as tweeted by Zhao.
This afternoon, FTX asked for our help. There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire https://t.co/BGtFlCmLXB and help cover the liquidity crunch. We will be conducting a full DD in the coming days.
— CZ 🔶 Binance (@cz_binance) November 8, 2022
Since the beginning of the argument between CZ and SBF, the price of FTT has decreased dramatically. According to CoinMarketCap, the current price of FTT is around $4, a sharp fall of 80.29% in the previous 24 hours.
According to on-chain data, Binance may not be the only party seeking to liquidate its FTT holdings. Crypto observer Collin Wu said that 1.9 million FTT worth about $44 million was transferred from the Genesis OTC desk to FTX, although CZ said that Binance was not involved in the transaction.
The sell-off has also impacted SOL, the native token of the Solana blockchain, which has a close association with FTX. In the previous 24 hours, SOL has also declined 25%, and currently, SOL is trading at $24.06.