- Alameda Research has provided proof of it’s BIT crypto token holdings following suspicion from BitDAO that the trading firm might be behind the token’s sudden 20 percent drop.
- Ben Zhou, the Founder of BitDAO, thanked the firm for its “swift action”, and cautioned others not to jump to such conclusions.
- BIT is down 7.6 percent over the last 24 hours, while FTT is at a deficit of greater than 30%.
Cryptocurrency trading firm Alameda Research has provided proof that it retains its 100 Million BitDAO (BIT) crypto token holdings after the community of one of the largest financing DAOs in the market aroused suspicions that Alameda was behind the token’s sudden 20 percent fall on Tuesday, November 8th.
The crypto tokens, worth an approximate $39 Million at the time of publication were moved to a designated wallet, as tweeted by BitDAO. Data on Etherscan outlines the execution of 5 transactions, including a 92 Million BIT transfer from the FTX exchange, 6.5 Million from an unknown wallet, and 3 smaller transfers from Coinbase Crypto exchange and other wallets.
Ben Zhou, the founder of BitDAO and Bybit, a derivatives exchange that 1st opened in China, thanked Alameda CEO Caroline Ellison for the firm’s swift response which “gave several confidence to the BitDAO community”.
“For others that are jumping into the conclusion, nothing is confirmed until proven, I am sure Alameda will be able to navigate the current straits,” Zhou added.
The praise came after BitDAO asked Alameda Research, which was established by Sam Bankman-Fried, together with FTX, to prove that it still held the 100 Million BIT crypto tokens it had received in a swap agreement in 2021. The DAO stated that it would consider selling 3.4 Million FTT crypto tokens if it was revealed that Alameda had indeed unloaded its BIT, as both parties had agreed to hold the crypto tokens for 3 years.
The suspicions came after BIT unexpectedly has decreased 20 percent in value from $0.40, to $0.30 early on Tuesday morning. BIT has marginally recovered since, and is currently worth $0.377 at the time of publication, putting it down 7.6 percent for the last 24 hours, as reported by data from CoinGecko.
FTX and Alameda have been facing increased pressure after CoinDesk published a report disclosing that Alameda holds large sums of FTT—FTX’s backbone crypto token which is used to reduce trading fees, to serve as collateral for futures positions, and more.
Binance Crypto exchange CEO Changpeng “CZ” Zhao was between the 1st to react, announcing that the exchange would sell all of its FTT holdings, triggering panic between crypto token holders and the exchange’s users. FTT is now currently worth $14.7 at the time of publication, down 34 percent in the last 24 hours, and 40 percent over the last 14 days, as reported by data from CoinGecko.
OCZ’s tweets seem to have run on to cause a bank run for FTX, as the exchange experiences the mass withdrawal of hundreds of millions of dollars, with some reporting that they are experiencing delays. FTX Founder and CEO Bankman-Fried responded to the situation, saying “a competitor is trying to go after us with false speculation. FTX is fine. Assets are fine”.
The other side
- It’s unclear what the cause of BIT’s 20 percent deficit was.
- While Alameda hasn’t sold its BIT, the market-wide FTT dump persists. Should the situation continue, the firm may well need to break its agreement with BitDAO to sell some crypto tokens in order to maintain value.
What’s the Big Deal?
FTX is one of the major cryptocurrency exchanges in the world. If the speculation of its insolvency and close relationship with Alameda Research hold weight, it could might mean that the involved corporations are in a tough spot. As of right now, it seems that the corporations have not required to sell BIT.
Read more about the skirmish in the middle of Binance Crypto exchange and FTX:
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