Changpeng Zhao, CEO of Binance, stated on Tuesday that “Merkle-tree proof of reserves” would soon be implemented on his exchange. Over the past 24 hours, the FTT token has fallen 78%, from almost $22 to $4.87. Early this week, FTX, controlled by billionaire Sam Bankman-Fried, saw outflows and withdrawal requests as unsettling suspicions regarding the business’s financials spread. FTX is considered by many to be insolvent. Rival Binance, which held over $500 million of FTT, started to offload its holdings. The news comes days after FTX sister firm Alameda Research’s balance sheet was composed of FTX’s own exchange token, FTT, raising questions and concerns that the company may not have been as well-collateralized as it purported to be. The five involved crypto companies did not respond to CoinDesk’s request for comment immediately.
There are growing concerns that the financial problems at Alameda Research could lead to a liquidity shortage in the larger digital asset market. It has a lot of FTT tokens on its balance sheet, which fell 80% in one day. Crypto trading companies frequently issue credit lines and take out loans for their trading activities through Clearpool, a well-known uncollateralized lending protocol. According to the data dashboard for Clearpool, Alameda Research has borrowed $5.5 million from Apollo Capital and Compound Capital Management. The trading company also took out a loan from a TrueFi lending pool for $7.3 million that was due to mature on December 20. Tokens from every corner of the crypto spectrum were swept up in the crypto carnage. Recently, BTC was down more than 10% over the preceding 24 hours, trading at roughly $18,500.The manager of a cryptocurrency fund, Joe DiPasquale, stated, “We don’t anticipate an extreme scenario” for bitcoin. In fact, if investors exit riskier assets, they may see an increase in inflows. In an email, the CEO of the NEAR Foundation said, “Consolidation is inevitable in the current bear market for cryptocurrencies.”
That’s it for today, see you tomorrow