- BitDAO’s community asked Alameda for evidence that the firm is holding 100m BIT tokens
- Alameda converted 3.36m FTT tokens to acquire the BIT
- Binance triggered market panic by liquidating FTT holdings
Leading decentralized autonomous organization BitDAO found its way into the FTX-Alameda drama today after BIT, its native token, lost 20% of its value, CoinDesk wrote.
Alameda bought 100m BIT last year. Where is it?
BitDAO’s community asked Alameda for evidence that the trading firm continued to hold 100 million BIT tokens, which they converted 3.36 million FTT tokens to acquire in November 2021. Under the exchange agreement, Alameda was required to hold the BIT for three years or more.
The community behind BitDAO is supported by Pantera, crypto exchange Bybit, and billionaire Peter Thiel among other notable backers. Bybit cofounder Ben Zhao tweeted:
BitDAO community is questioning the sudden dump of $bit token caused by Alameda dumping and breaching the 3 year mutual no sale public commitment. Nothing is confirmed but BitDAO community would like to confirm proof of funds from Alameda.
Liquidation fears
The leading DAO's fears could be related to speculation that the trading firm is liquidating its other digital assets to defend FTT, crypto exchange FTX's native cryptocurrency. The FTT token has lost almost half of its value in the past four days, leading many to buy the dip.
Last week, CoinDesk wrote that Alameda had huge volumes of FTT tokens on its balance sheet. Binance triggered market panic by liquidating its FTT holdings, and that’s how the drama started.
Community makes threat
BitDAO’s community indirectly threatened Alameda they would take action if the firm didn’t provide proof in 24 hours, like selling the FTT acquired.
The organization got 3,362,315 FTT. According to their statement, they will decide “how to deal with the $FTT in the BitDAO Treasury” by voting or another urgent action if proof is not provided in the time given.
Calming the market
In response to Zhou's tweet, Alameda Research CEO Caroline Ellison assured they would provide evidence they were holding the funds once things calmed down. Bybit’s cofounder thanked her for the quick response.
In its wake, the market calmed down. The BIT token rose to $0.38 after losing more than a quarter of its value early this morning according to TradingView data. BitDAO also proposed to enable the community to check and monitor that Alameda is honoring its FTT-BIT swap commitments.
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