Binance, Others Halt FTT Token Deposits, Here’s Why

UTC by Mayowa Adebajo · 2 min read
Binance, Others Halt FTT Token Deposits, Here’s Why
Photo: Depositphotos

About $400 million worth of FTT tokens were launched on Sunday, but there might be more to the release than meets the eye.

Crypto exchange platform Binance has resorted to blocking all deposits of the native token of the FTX exchange – FTT. The decision was announced on Sunday, following a release of nearly $400 million worth of FTT tokens in a move that appeared shady.

Binance Blocks FTT Token as Other Exchanges Follow

It might be worth mentioning that the tokens that were launched rightly originated from FTT’s main deployer address. But despite that, as of publication, neither FTX nor any of its affiliates have yet issued any official statement concerning the release. Moreover, the launch also took place out of schedule. So, that further fueled the growing concerns of Binance.

Recall, FTT tokens launch usually follows a specific pattern. That is, they are usually released periodically. However, Sunday’s release was entirely different, seeing over 192 million FTT tokens launched, per blockchain data.

As a result, Binance founder Changpeng Zhao (CZ) quickly took to Twitter to announce his reservations about the whole process. He wrote:

“FTT contract deployers moved all remaining FTT supply worth $400 million, which should be unlocked in batches. Not too sure what’s going on.”

In a similar move to Binance, Huobi Global might have restricted FTT deposits as well. According to Justin Sun who backs it, Huobi will be monitoring how the situation continues to unfold. But in the meantime, it will also halt FTT deposits, effective immediately.

Contagion Fears Surface

The FTT tokens release follows a week-long series of problems that led to the implosion of the FTX exchange.

The exchange first came under pressure, after reports surfaced about inconsistencies in the balance sheet of its sister firm – Alameda Research. At the time, the reports claimed that a large part of the firm’s assets was denominated in FTT tokens.

Clients soon began making a run for it and eventually, FTX filed for chapter 11 bankruptcy protection on Friday. But as is common when firms as big as FTX go bankrupt, there is a high risk for potential contagion. This is as other firms who are exposed to FTX in one way or another, also risk going down with it. Unfortunately, that may be a whole lot.

As of publication, the FTT token is now down by over 90% in November alone. That is after falling another 15% to $1.51 in the past 24 hours, per CoinMarketCap data.

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