FTX CEO Reacts To Bankruptcy Rumors

Following the news making the round that FTX crypto exchange is virtually bankrupt, the FTX founder and CEO Sam Bankman-Fried has outrightly denied the claim, stating that the exchange has no liquidity issues as per a post.

1) A competitor is trying to go after us with false rumors.

FTX is fine. Assets are fine.

Details:

— SBF (@SBF_FTX) November 7, 2022

The rebuttal followed Binance CEO Changpeng Zhao’s statement that the exchange would initiate FTT token liquidation as a risk management.

As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4

— CZ 🔶 Binance (@cz_binance) November 6, 2022

Bankman-Fried further stressed that the exchange has sufficient funds to cover clients’ holdings, adding that all client assets are in safe condition including their treasuries. 

2) 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.

Some details on withdrawal speed: https://t.co/tSjhJW3JlI

(banks and nodes can be slow)

— SBF (@SBF_FTX) November 7, 2022

Meanwhile, Binance co-founder and chief customer services officer Yi promptly reacted to FTX CEO that Binance is not considering selling its FTT token due to any perceived discussion between the two exchanges. Yi asserted that the decision was borne out of Binance’s appetite.

2）@cz_binance also publicly shared thoughts on that as our community was asking. We always respond to what our community asks in a transparent and direct way. https://t.co/62iG0CQDTt

— Yi He (@heyibinance) November 7, 2022

In the same vein, FTX on Nov. 7 assured its esteemed users complaining about withdrawal delays that the exchange is on top of the situation, adding that the matching engine is being put in the right direction for things to run smoothly.

1: Support updates:

— FTX (@FTX_Official) November 7, 2022

Fear Rises Among FTX Users

Fears are emerging among FTX users that the exchange’s situation may be related to Celsius, which also halted withdrawals in the midst of its recent crisis.

However, the recent occurrences amid FTX exchange have triggered a sell-off of FTX token coupled with the general downtrend of the crypto market. 

Recall that on-chain analysis reported that an unknown wallet transferred roughly 23 million FTT to Binance, which was worth $584 million. The development was later confirmed by Binance CEO CZ, stating that it was initiated by the exchange as part of its decision to liquidate its FTT position.

It was concluded that Binance’s decision was due to the report that FTX cryptocurrency hedge fund Alameda Research could go bankrupt due to its lack of altcoins liquidity.

At press time, FTT token is down by 21.% in the last 24 hours and is trading at $17.5 according to data from CoinMarketCap.