Cryptos Plunge As Clash Between Industry Giants Raises Pollution Fears

New York
CNN business

Bitcoin and other cryptocurrencies tumbled on Tuesday after a dispute between two of the industry’s biggest players spread fear among investors.

The damage stems from the leak of the internal token issued by FTX, the crypto exchange founded by billionaire crypto firm Sam Bankman-Fried. The token, FTT, fell 35% on Tuesday morning, sparking contamination concerns across the crypto space.

Bitcoin, the world’s most popular digital currency, fell about 6% early Tuesday to $19,448. Ether, the second most popular, fell 7%.

Pressure on FTX began to build over the weekend, when the founder of rival exchange Binance tweeted that the company would sell all of its holdings in FTT. Founder Zhao Changpeng did not elaborate on why Binance was being sold.

“Because of the recent revelations [come] Clearly, we have decided to liquidate the remaining FTT on our books.” he tweeted.

Bankman-Fried dismissed Zhao’s cryptic concerns as “false rumours” from a competitor, Tweeting that FTX and its assets are “fine”.

Bankman-Fried and Zhao are both stars in the crypto world, although Bankman-Fried’s profile has been particularly high as he used his wealth to bail out struggling crypto companies this year. In the summer, the 30-year-old entrepreneur made deals worth at least $1 billion to boost the industry.

Bankman-Fried’s FTX had been considering going public after its $32 trillion valuation, but earlier this year, the CEO told Bloomberg he would hold off on holding the company until the IPO environment became more attractive.

Meanwhile, Zhao’s Binance, the world’s largest cryptocurrency exchange, was recently targeted by federal prosecutors seeking records. its anti-money laundering checks, Reuters reported in September.

Prosecutors have asked Binance to return the messages of Zhao and 12 others, allowing the company to detect illegal transactions and hire US customers, Reuters reported. The Justice Department also sought records containing instructions to “destroy, alter, or remove documents from Binance’s files” or to “transfer them out of the United States.”