Crypto Markets Spooked By FTX Platform Withdrawals

Justin Freeman

Crypto Markets Spooked By FTX Platform Withdrawals

  • Twitter spat between high-profile crypto bosses is alarming investors
  • The war of words between rival exchanges FTX and Binance points to potential financial shortcomings in FTX
  • Fears are growing that another LUNA-style implosion could be about to unravel

Events at Crypto exchange FTX are beginning to look like a ‘run on the bank’, and that’s not only bad news for those holding their coins there but also for the price of some coins. FTT, the native token of the FTX exchange, has seen its price plummet, with aftershocks being felt across the sector.

What’s Going On at FTX?

A verbal sparring match between two of the most prominent players in the crypto sector has added extra colour to a move by the Binance exchange to dump all of its FTT holdings. Binance chief, Changpeng Zhao, has for some time been distancing Binance’s links to FTX, and his recent statement associating the rival platform with LUNA has not gone down well with FTX staff. On 6th November, Zhao Tweeted:

“Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won’t pretend to make love after divorce. We are not against anyone. But we won’t support people who lobby against other industry players behind their backs. Onwards.”

Source: Twitter

In response, FTX’s owner and crypto guru Sam Bankman-Fried stated that his platform’s books are clean, regulated and audited to GAAP standards.

“A competitor is trying to go after us with false rumors. FTX is fine. Assets are fine. FTX has enough to cover all client holdings. We don’t invest client assets (even in treasuries). We have been processing all withdrawals and will continue to be.”

Source: Twitter.

The concerns highlighted by Binance and others appear to stem from the relationship between two firms owned by Bankman-Fried, FTX and Alameda Research. Both businesses are independent of each other, but Alameda Research is quoted as holding nearly $3.66bn of unlocked FTT tokens, which is a sizeable percentage of the total $14.6bn AUM of that coin.

With analysts digging into the detail of the links between the firms, FTX is maintaining that all the accounting practices are above board. Withdrawals are being processed in line with standard T&Cs, and Bankman-Fried has reiterated that no FTT tokens held by FTX have been converted to other assets, “not even Treasuries”.

It’s definitely a situation to monitor. One irony is that to demonstrate its financial health, FTX is pulling out all the stops to ensure withdrawals are processed as soon as possible, something other exchanges are currently failing to do. But whether new investors will be rushing to place holdings at FTX is, for now, another issue.

 

Crowdsourcing information about scam brokers can help others avoid falling into the traps set by disreputable brokers and you can share your experiences here. If you would like to know more about this particular topic, or have been scammed by a fraudulent broker, you can also contact us at [email protected]


Justin Freeman

Latest news

Forex vs Crypto: What’s Better For Beginner Traders?
The crypto and forex markets are two of the world’s most popular among investors and traders. Read more
Three Great Technical Analysis Tools for Forex Trading
You don’t have to be very technical minded to make use of technical analysis in your forex trading. Read more

Safest Forex Brokers 2024

Broker Info Best In Customer Satisfaction Score
#1 73% of retail CFD accounts lose money. Founded: 2014 Global Forex & CFD Broker
Number One Broker
Best Trading Conditions Visit broker
4.9
#2 Blackbull LogoYour capital is at risk Founded: 2014 Global Forex Broker
Number One Broker
BEST SPREADS Visit broker
4.8
#3 AvaTrade LogoYour capital is at risk Founded: 2006 Globally regulated broker
Number One Broker
BEST CUSTOMER SUPPORT Visit broker
4.9
#4 plus500 logo 80 april 2024* 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money Founded: 2008 Global CFD Provider
Number One Broker
Best Trading App Visit broker
5
#5 Between 74-89 % of retail investor accounts lose money when trading CFDs Founded: 2010 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
4.9
#6 Forex Broker eToro Logo76% of CFD traders lose money Founded: 2007 Global CFD & FX Broker
Number One Broker
ALL-INCLUSIVE TRADING PLATFORM Visit broker
4.9
#7 XM LogoYour capital is at risk Founded: 2009, 2015 and 2017 Global Forex Broker
Number One Broker
Low minimum deposit Visit broker
5
#8 FxPro LogoYour capital is at risk Founded: 2006 CFD and Cryptocurrency Broker
Number One Broker
CFD and Cryptocurrency Visit broker

    Forex Fraud Certified Brokers

    BlackBull Logo Small
    FxPro logo
    plus500 logo 80 april 2024
    FXTM Logo
    XM Logo
    eToro Logo
    AvaTrade logo
    CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.