Sam Bankman-Fried, CEO of FTX and more often known by his initials, “SBF,” issued a lengthy apology to the crypto community in which he promised them that the current turn of events was only going to have an impact on FTX international.
According to him, the financial situation of FTX US, an exchange established in the United States and open to American customers. He gave the users his word that FTX US was utterly liquid and that any user may withdraw their funds in full.
However, many people are starting to doubt the legitimacy of his assertion due to a recent announcement on the FTX US website, which is beginning to raise concerns among users. Trading may be suspended on FTX US over the next few days, as stated in a banner located at the very top of the website.
The message encouraged users of the exchange to shut down any positions that they may wish to close down while assuring users that withdrawals are and will continue to be available.
The “Bank Run” And Its Effects
Within the last week, Binance CEO Changpeng “CZ” Zhao announced that his exchange would sell its FTX Tokens holdings. This announcement was the precipitating event that led to FTX International’s liquidity concerns.
Because of CZ’s declaration, a “bank run” was essentially started, in which customers of FTX sought to withdraw cash, only to find out that the exchange did not have enough liquidity to satisfy the demand.
It has also been reported that Bankman-Fried phoned investors over the previous week and told them that the exchange needed $8 billion in emergency liquidity to assist fulfill the withdrawal demands and that it wanted to obtain $3 billion to $4 billion.
These claims came to light within the past week.
Etherscan published statistics on October 10 indicating the company that had been experiencing issues seemed to have restarted withdrawals.
