By Hannah Lang and Elizabeth Howcroft

LONDON (Reuters) -Sam Bankman-Fried, the billionaire founder of crypto exchange FTX, sought to reassure crypto investors on Monday after a rival exchange, Binance, said it would liquidate its holdings of FTX's native token.

Binance's CEO, Changpeng Zhao, said in a series of tweets on Sunday that his firm would sell its holdings of the FTX token "due to recent revelations that have come to light." Zhao did not specify which revelations he was referring to or how much of the token Binance held.

"A competitor is trying to go after us with false rumors," FTX's Bankman-Fried said in a series of tweets on Monday. "FTX is fine. Assets are fine."

Bankman-Fried said in his tweets that FTX keeps "audited financials" and is "highly regulated". He did not initially specify which competitor he was referring to, but tagged Zhao in a later tweet, saying "I'd love it, @cz_binance, if we could work together for the ecosystem."

Crypto enthusiasts had raised questions on Twitter last week about FTX's token, following a report from crypto news website CoinDesk about a leaked balance sheet from Alameda Research, a crypto trading firm founded by Bankman-Fried that maintains close ties with FTX.

According to CoinDesk's report, much of Alameda's $14.6 billion in assets are held in FTX's token, which is called FTT. Reuters was unable to independently verify the accuracy of the report or the origin of the leaked balance sheet.

Since the CoinDesk report on Nov. 2, FTX's token has shed around $400 million from its market cap as traders sold the token. It is trading near its lowest since February last year, according to CoinGecko data.

Alameda CEO Caroline Ellison also said in a tweet that the "balance sheet info which has been circulating recently" only showed a subset of Alameda's corporate entities. The firm has more than $10 billion in assets that are not reflected in the CoinDesk report, she said.

Crypto investors have been on edge following a rocky summer, which saw token prices plunge as rising interest rates and a broader financial market downturn prompted investors to ditch riskier assets.

Mainstays in the industry like Singapore-based crypto hedge fund Three Arrows Capital and crypto lenders Celsius Network and Voyager Digital have filed for bankruptcy. FTX won a bid in September to buy the assets of Voyager, and Bankman-Fried has said his exchange is working to return money to Voyager customers.

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The public disagreement shows tension between the two billionaire founders of major crypto exchanges.

In one tweet on Sunday, Zhao sought to dismiss speculation that the decision to sell the token was due to competition. "Regarding any speculation as to whether this is a move against a competitor, it is not," he said.

But in a tweet later on Sunday, Zhao said: "We won't support people who lobby against other industry players behind their backs," without giving further explanation.

Bankman-Fried has been one of the largest individual political donors in the United States leading up to the Tuesday midterm elections, contributing more than $39 million to campaigns in the current cycle.

Most of the money he has donated has gone to Democrats, although he has also supported Republicans like Sen. John Boozman, who is set to be the top Republican on the Senate Agriculture Committee — which has jurisdiction over the U.S. Commodities Futures Trading Commission — if Republicans retake control of the Senate.

Zhao also said in Sunday's tweets that his liquidation of FTX's token was "post-exit risk management, learning from LUNA" - a reference to the collapse of a so-called stablecoin TerraUSD and a linked token, Luna, in May this year, which saw holders collectively lose $42 billion and sent shockwaves through crypto markets.

With a market cap of around $3 billion, FTX's token ranks as the 28th largest cryptocurrency, according to CoinGecko.

(Reporting by Hannah Lang and Elizabeth Howcroft; editing by David Evans)