Binance stops accepting FTX's token for deposit, CEO says
FTX filed for bankruptcy protection on Friday after the company faced a liquidity crisis and Binance backed out of a takeover deal
D.A. Davidson director of research Gil Lauria and Duke Financial Economics Center policy director Lee Reiners debate the case for cryptocurrency as the FTX crisis continues to unfold on 'The Claman Countdown.'
Cryptocurrency exchange Binance has made a major decision concerning the tokens of FTX, the rival exchange that filed for bankruptcy protection on Friday.
Binance has stopped accepting deposits of FTX's FTT token on its platform, its chief executive Changpeng Zhao said on Sunday.
He also urged other rival exchanges to do the same.
On Saturday, FTX said it had detected unauthorized access and analysts said hundreds of millions of dollars of assets had been moved from the platform in "suspicious circumstances".
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Binance CEO Changpeng Zhao ( (AP Photo) / AP Newsroom)
"(Binance) has stopped FTT deposit, to prevent potential of questionable additional supplies affecting the market. We will monitor the situation," CEO Zhao said in a tweet.
"FTT contract deployers moved all remaining FTT supply worth $400 million, which should be unlocked in batches. Not too sure what's going on," he added, in another tweet.
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The sudden and rapid downfall of FTX came after the company — facing a liquidity crisis — agreed to sell itself to rival Binance for an undisclosed amount. Customers fled the exchange after becoming concerned about whether FTX had sufficient capital.
But Binance, the world's largest crypto exchange, backed out of the non-binding deal after taking a look at the books of FTX, at which point it became clear that the smaller exchange’s problems were too big to solve.
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CEO Sam Bankman-Fried had warned investors earlier this week that without an imminent infusion of $8 billion in cash, the company may have no choice but to file for bankruptcy.
Reuters contributed to this report.