FTX is sinking further into the pit, without any anchor. There are several problems that threaten the stability of the crypto exchange. There appears to be a continuing war between FTX, Binance and other crypto exchanges. It is believed that their CEOs Sam Bankman Fried (SBF), and Changpeng Zhao, (CZ) are involved in this.
Binance declared its intention to dispose of FTT tokens it held, and has done so. There’s still no explanation for Binance’s sudden lack of interest in the FTT tokens. Some speculate that Binance might view FTT tokens in its records as a liability.
Following Binance’s liquidation of FTT tokens, things are becoming more complicated for FTX. The company now has delays when processing Bitcoin transfers and stablecoins for clients. The natural outcome of events is reducing users’ confidence in FTX.
FTX currently faces the loss of Ethereum (ETH), its reserves. CryptoQuant data provider claims that the exchange lost nearly 300k Ethereum in the last two days.
At this moment the Ethereum reserve for FTX amounts to 108 246.43. This represents one of the largest drops in Ethereum reserves since November 2020.
FTX Takes Action to Repair ETH Reserves
According to news reports, FTX has made some efforts to grow its ETH reserve. It is using subsidiaries as well as other cryptocurrency exchanges. Nansen data showed that Alameda was owned by SBF and had transferred 26600 ETHs from FTX over the past 24 hours.
Alameda was left with 9,325 Ethereum after the transfer. Alameda sent large quantities of stablecoins using the FTX hot crypto wallet.
PeckShieldAlert data shows that FTX took 1,985 ETH of Gearbox Protocol’s liquidity. Blockfolio (another SBF company) also transferred 13,555 ETH towards FTX.
Currently, the crypto exchange’s node throughput is limited, making it challenging to process Bitcoin withdrawals. Users complaining about delays in transaction executions for FTX platforms are now complaining that they take 5-10 hours to complete transactions.
Also, stablecoin creation and redemptions have been slowing at the exchange. However, the exchange points fingers at banks as the cause of the slower creation and redemption of stablecoins. According to the exchange, wire transfers should clear by Monday after opening banks.
FTT Tokens Dips By 10%
The CEO of Binance crypto exchange, CZ, announced the firm’s plan to liquidate its FTT holdings. CZ stated that action would begin in the coming months. FTT was negatively affected by this announcement. The token fell 10% in the last 24 hours. Even the coin hit $22.32 as a low.
FTT started to show signs of improvement due to low volatility in crypto market. FTT trades at $22.33 as of press time
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