The Chief Executive Officer of Binance, Changpeng Zhao, has confirmed that his company will gradually be offloading its holdings in FTT – the native coin for rival exchange, FTX.

Cutting Ties With A Competitor

Earlier this week, Zhao took to Twitter to confirm that his company had begun moves to exit its full position in the FTX Token (FTT). The billionaire exchange boss confirmed that they had decided to liquidate their entire position, explaining that the move was simply due to cautionary measures.

Zhao’s Twitter thread pointed out that Binance had held roughly $2.1 billion in FTT and Binance Dollar (BUSD) tokens as part of its exit from FTX’s holdings back in 2021. The exchange had been an early investor in FTX, holding an equity position as far back as 2019, and in light of recent revelations, they had now decided to clear their remaining FTT tokens from their books.

On Saturday, 22,999,999 FTT, worth $84 million at the time, was transferred to Binance’s exchange. Zhao confirmed that the funds moved were part of Binance’s liquidation maneuver. He further explained that the move would take a few months to be completed as they hold a significantly large amount of FTT and would try to do it without causing major disruptions to the digital asset’s price.

However, Caroline Ellison, the head of Alameda Research, a quant trading firm founded by FTX CEO Sam Bankman-Fried, has offered to buy all of Binance’s FTT holdings for a unit price of $22. This would represent an 8% discount from the digital asset’s high on the day Zhao revealed the sale.

Speaking on Binance’s motives, Zhao did his best to dispel any notion that there was some animosity between both companies. He added that Binance had always valued inter-industry collaboration and did not look to cause the downfall of a major player in an industry still in its infancy.

Nevertheless, he highlighted that Binance would not support industry players who lobby and make moves against other market players behind their backs. Zhao appeared to have referenced a policy proposal from Bankman-Fried, in which the latter asked regulators to focus on the decentralized finance (DeFi) sector while conveniently leaving out centralized exchanges like FTX.

Trouble in Bankman Land?

Zhao also explained that the liquidation is in a move to protect Binance’s books as the company would be looking to avoid a loss similar to the one it made in the Terra LUNA debacle.

Back in May, the billionaire pointed out that Binance received about 15 million LUNA tokens as part of an investment in Terra and $12 million worth of UST, which it obtained through staking. At LUNA’s height, Binance’s holdings were worth $1.6 billion. Now, the assets would have cratered in value.

Considering that it is not taking preemptive steps on its FTT holdings, it questions whether it is a strong asset to be held at the moment. The token has come under heavy scrutiny recently, with recently leaked documents revealing that billions of dollars worth of assets held by Alameda Research had been tied up in the FTT.

Nevertheless, top brass from Alameda and FTX have quickly denied these insolvency rumours.

Elison stated last week that the leaked balance sheet wasn’t a reflection of the company’s financial health as it didn’t account for another $10 billion worth of assets held by the company. Bankman-Fried also added that several “unfounded rumours” about both companies had been circulating recently.