Arguably the two biggest players in all of crypto are having a falling out.
FTX CEO Sam Bankman-Fried and Binance CEO Changpeng Zhao are trading allegations and it could sink the crypto market with them.
It traces back to FTT coin, which is FTX's token and a report from CoinDesk that says Bankman-Fried's trading company Alameda Research has about $6 billion of its $14.6 billion assets in the coin, which his other company created.
After the disclosures, Zhao tweeted that he will liquidiate the $529 million in FTX tokens that Binance holds over a few months. While saying it was risk management, he also hinted at another motivation.
In response Bankman-Fried offered to buy the entire position at $22, which is just below where it's trading.
Predictably, the moves have set off an endless series of rumors about insolvency and crypto traders encouraging each other to pull their funds.
The promise of crypto was that it wouldn't need centralization and it could be trustless but here we are once again wondering whose word to trust.
"FTX is fine. Assets are fine," Bankman-Fried tweeted an hour ago in a sign that the accusations are hurting. " FTX has enough to cover all client holdings. We don't invest client assets (even in treasuries). We have been processing all withdrawals, and will continue to be."
If anything, the market response has been reassuring. If this would have happened six months ago it would have been a bloodbath but bitcoin is down $400 to $20,736. Solana is feeling some of the heat because it's tied to Bankman-Fried but is still only down 12%.
In any case, this might not be the final chapter of this story. No one wins in a crypto civil war.
