FTX’s token falls sharply amid Binance controversy

FTT, the token created by crypto exchange FTX, dropped sharply the past hour.

The token’s price fell 19%, from roughly $22 to below $18 shortly after 10:00 p.m. ET, according to data tracked by CoinGecko.

The news comes amid a high profile standoff between FTX and Binance, two of the crypto sector’s biggest exchanges. Binance CEO Changpeng Zhao said in a tweet on Nov. 6 that the exchange would begin selling off its FTT holdings following “recent revelations” — seemingly in reference to an earlier report from CoinDesk that revealed details of Alameda Research’s balance sheet. Alameda is a crypto trading firm, which is owned by FTX's Sam Bankman-Fried. 

After Zhao’s tweets, FTX CEO Sam Bankman-Fried tried to calm the market. He said yesterday that the exchange is “fine,” and called for FTX and Binance to work together for the good of the industry. Alameda CEO Caroline Ellison had offered to buy Binance’s FTT holdings at $22 per token.

In a note published Nov. 7, market maker B2C2 said the price of Solana and FTT may become the most important data points for monitoring the trajectory of the crypto market this week. Traders in the market are concerned that a drop in the price of FTT could have a knock-off effect on Alameda, which holds billions of dollars worth of the token on its balance sheet. 

Such a decline could impact the exchange to which it is tied, FTX. Already, the firm has struggled with withdrawals. FTX said in a recent tweet, however, that the withdrawals queue “is decreasing and getting back to more reasonable levels; nodes and banks catching up.”

FTX was contacted for comment but did not respond by 10:40 p.m. ET.