At the moment, the CEO of FTX Sam Bankman-Fried is chaining crisis situations: between the publication of the pejorative report on the state of Alameda Research, the massive withdrawals of his customers, and the fall of his FTT token due to setbacks with Binance, the exchange has rarely seen such a tense period for its future.
FTX chercherait-il par tous les moyens à freiner la chute de son token FTT ?
FTX loses some of its customer base
Cryptocurrency exchange FTX, run by Sam Bankman-Fried, is facing a unprecedented wave of withdrawals.
After the publication of a report concerning Alameda Researcha trading company owned by Sam Bankman-Fried, it turns out that this company would be at risk of insolvency in the event of a major drop in the price of the FTT token. Since the FTT token is that of the FTX platform, part of the users started to flee the cryptocurrency exchange.
Indeed, the report shows that Alameda Research allegedly owns $5.8 billion in FTT cryptocurrency. The problem ? FTT tokens in circulation are only $3 billion.
But for 48 hours, things have accelerated: after the announcement of a transfer of 23 million FTT made by Binance, from an unknown wallet to the Binance exchange, FTX customers start fleeing the platform and withdrawing their funds excessively.
According to CryptoQuant, FTX’s ETH reserves have dropped to the lowest level since November 2020. The current FTX ETH reserves are 108,246.43, and its ETH reserves have decreased by nearly 300,000 in the past two days. https://t.co/sbrhUYrMKW pic.twitter.com/w5rdcRyLS3
— Wu Blockchain (@WuBlockchain) November 7, 2022
“According to CryptoQuant, FTX ETH reserves have fallen to their lowest level since November 2020. FTX ETH reserves are currently at 108,248.43 ETH, and this ETH reserve has decreased by almost 300,000 ETH in the past two days. »
In parallel, massive withdrawals of stablecoins are carried out. In just 48 hours, FTX’s reserves in USDT went from 120 million to $3 million. There is no doubt that the exchange is currently undergoing one of its biggest crises.
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The FTT token under pressure
The large withdrawal of cryptocurrencies is not the only problem of FTX.
After Binance’s announcement on the transfer of its FTT tokens, the price of this cryptocurrency has decreased by 10% in the last 48 hours.
Evolution of the price of the FTT tokens since the start of the case
Moreover, several whales that have had FTT for several months have sold their tokens, sometimes recording losses amounting to several million dollars.
In parallel, the SOL cryptocurrency of the Solana blockchain is also falling in registering at the writing of these lines a loss of 12% in 24 hours. As a reminder, the CEO of FTX Sam Bankman-Fried is very close to the Solana network and regularly praises the merits of this blockchain.
To reassure investors, FTX tries to defend itself : Sam Bankman-Fried retweeted a message claiming that the data collected about Alameda Research was incomplete.
A few notes on the balance sheet info that has been circulating recently:
– that specific balance sheet is for a subset of our corporate entities, we have > $10b of assets that aren’t reflected there
— Caroline (@carolinecapital) November 6, 2022
“A few remarks on the information relating to the balance sheet that has circulated recently: this specific balance sheet concerns only a subset of our entities. We have over $10 billion in assets that are not there. »
Nevertheless, investors are always on their guard: at present, no documents have been transmitted by either Alameda Research or FTX. In a context of crisis, this lack of transparency can only increase users’ distrust of the exchange.
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A turnaround for FTX?
To cope with FTT sales and withdrawals, FTX would try to find funds by all means.
Since yesterday, hundreds of millions of dollars are sent by Circle to Alameda Researchwith these funds then being redirected to FTX.
Alameda Research is sending stablecoins to @FTX_Official in size.
Just 15 minutes ago, they received 56M $USDC from @circle and then deposited it on FTX.
Within the last 24h, they have sent a total of $257M. pic.twitter.com/3qZc1ULjEZ
— The Data Nerd (💙,🧡) (@theData_Nerd) November 7, 2022
“Alameda Research bulk sends stablecoins to FTX. Just 15 minutes ago, they received 56 million USDC from Circle, and then deposited it on FTX. In the last 24 hours, they sent a total of 257 million dollars. »
By updating the results at the writing of these lines, more than 300 million USDC have been sent by Circle in the last 24 hours. Would FTX need outside help to deal with its losses?
These funds, transmitted by Circle, could potentially make it possible to buy back the FTTs sold en masse and thus avoid causing the price of the token to fall further.
This situation is reminiscent of the various bankruptcies that took place in June 2022, such as that of Celsius Network.
At that time, Sam Bankman-Fried mocked the cryptocurrency industry stating that “ some third degree exchanges are already secretly insolvents”.
Today, the situation is no longer in his favor : it is its direct competitors who recover the funds transferred from its customers, including Binance on the front line.
The war between the two behemoths FTX and Binance has only just begun.
👉 To go further – Who is Sam Bankman-Fried (SBF), the founder of FTX and Alameda Research?
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Sources: CryptoQuant, TradingView
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Always enthusiastic about new technologies, I gradually moved closer to Web3-related activities during the year 2021. Over time, I wanted to add my stone to the building. It was then that I became an editor, with the aim of explaining cryptocurrency-related topics to as many people as possible.
Timothy Bourbotte
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