BitDAO Asks Alameda For Proof of Funds Amid Sudden BIT Dump

BitDAO may terminate its token swap and hold agreement with quant crypto trading firm Alameda Research.

This follows fears that Alameda may have dumped 100 million BIT tokens.

• BitDAO has asked Alameda to confirm that it has not sold any of the DAO’s native tokens as part of an earlier agreement between both entities.
• The DAO filed a proposal on Tuesday asking Alameda to provide an on-chain address for the coins after the BIT tokens suddenly crashed 25% in less than an hour.
• BitDAO and Alameda conducted a token swap on November 2, 2021. The former swapped 100 million BIT tokens with the quant trading firm for 3,362,315 FTT.
• Following the swap, BitDAO and Alameda agreed not to sell either token for the next three years.
• Meanwhile, BitDAO has asked Alameda to respond within 24 hours, or the DAO may take action with the FTT tokens in its treasury.

“If this request is not fulfilled, and if sufficient alternative proof or response is not provided, it will be up to the BitDAO community to decide (vote, or any other emergency action) how to deal with the $FTT in the BitDAO Treasury.”

• Alameda CEO Caroline Ellison, however, said that the trading firm had nothing to do with the BIT price dump.

“Busy at the moment but that wasn’t us, will get you proof of funds when things calm down.”

• BitDAO’s request is the latest salvo in the ongoing saga. The price of FTT crashed 25% on Tuesday and is now trading at $17 at the time of reporting.
• It all began when reports claimed that Alameda was overexposed to FTT. Following the reports, Binance CEO Changpeng Zhao announced that the exchange will be liquidating its FTT holdings.
• This triggered a bank run on FTX, with the platform having to process large withdrawals leading to fears about the exchange’s solvency
• FTX CEO Sam Bankman-Fried allayed those fears on Monday, saying that FTX is in good condition and customers’ funds are safe.