FTX Binance Fallout: Bitdao Community Asks Alameda Research to Respond to Token Dump Allegations
After the Bitdao token’s quickfire plunge on Nov. 7, members of the Bitdao community have asked Alameda Research to address rumors the principal trading platform has dumped Bitdao’s BIT tokens. The dump, if confirmed, would be a breach of a swap agreement between the two entities which prohibits the offloading of each other’s tokens before […]
After the Bitdao token’s quickfire plunge on Nov. 7, members of the Bitdao community have asked Alameda Research to address rumors the principal trading platform has dumped Bitdao’s BIT tokens. The dump, if confirmed, would be a breach of a swap agreement between the two entities which prohibits the offloading of each other’s tokens before Nov. 2, 2024.
Alameda Research Has 24 Hours to Address Dump Allegations
Following the BIT token’s sudden plunge — from nearly $0.38 to $0.31 between 11:00 and 11:05 p.m. EST on Nov. 7 — the Bitdao community has asked the Alameda Research team to respond to token dumping allegations. In its BIP-4 update, the Bitdao community said if its request “is not fulfilled and if sufficient alternative proof or response is not provided” within 24 hours, then a vote to determine the fate of FTT tokens held in the Bitdao treasury will be held.
According to the update, Bitdao’s Oct. 30 swap agreement with Alameda Research required the former to hold 3,362,315 FTT tokens in its treasury. Likewise, the agreement also compelled Alameda Research to hold 100 million BIT tokens for a period of three years. As per the agreement, both parties had committed not to sell each other’s tokens before Nov. 2, 2024.
Fallout Over SBF’s Alleged Backstabbing of Industry Rivals Worsens
In a response to Bybit co-founder Ben Zhou’s tweet, which reiterated the Bitdao community’s concerns over Alameda Research’s alleged role in the BIT token’s plunge, the latter firm’s CEO Caroline Ellison insisted that the principal trading firm was not behind the dump. Ellison explained:
Busy at the moment but that wasn’t us, will get you proof of funds when things calm down.
However, some Twitter users have rejected Ellison’s denial and have pointed to onchain data which appears to suggest that Alameda Research is in breach of its agreement with Bitdao.
But you did sell 4,637,839 $BIT ($1.6M), didn't you?https://t.co/NRDFE6GxB5
— Lookonchain (@lookonchain) November 8, 2022
Reports of Alameda Research’s alleged dumping of BIT tokens came as the fallout between the principal trading platform’s founder Sam Bankman-Fried (SBF) and the decentralized finance (defi) community Alameda’s regulation of Bitdao worsened.
As reported by Bitcoin.com News, the rumors and allegations that SBF had lobbied against rivals had prompted Binance to offload nearly 23 million FTT tokens on Nov. 5. Before Binance’s dump of FTT tokens, reports of FTX’s insolvency had seen the token plunge from just over $25 on Nov. 5 to just under $17 at the time of writing.
Commenting on FTT’s plunge, Joe Consorti, a market analyst, claimed in a tweet that many traders are now shorting the token and this has led to the complete vaporization of $500 million in just two hours.
“Everyone and their mother is shorting this thing. Every single circulating unit of FTT is probably sold short right now. FTX has to sell dollars to contend with Binance’s and retail’s spot sell pressure, as well as the derivatives apes. Congrats on this CZ Binance, seriously,” tweeted Consorti.
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