Concern about crypto exchange FTX: Insolvency rumors depress FTT course

After Binance announced that it would sell all FTT holdings, the pressure on the crypto exchange FTX increased. The course of the exchange token FTT is falling, investors are withdrawing their deposits from FTX, and there are said to be difficulties with larger payments. Concerns about the insolvency of the crypto exchange are growing on the market.

A sentence with X: FTX

It started last Sunday, November 6th, with a Tweet from Binance CEO Changpeng “CZ” zhao. Binance has decided to “liquidate all remaining FTT on our books”. The reason is “recent revelations that have come to light,” said Changpeng Zhao, who fueled bankruptcy rumors about FTX with the short message. It was preceded by a Coindesk report. Accordingly, the reserves of Alameda Research consist largely of the FTT token. Alameda Research was founded by FTX CEO Sam Bankman-Fried.

Alameda’s foundation consists “largely of a coin invented by a sister company,” according to the report. The scenario presented: If the FTT token tips over, Alameda’s reserves will melt away – and FTX could slide into bankruptcy.

Binance rejects offer from Alameda

The news caused widespread sales on the crypto market. FTT has collapsed by 25 percent compared to the previous day. At the time of writing, a token is trading at $17 – down 35 percent on a weekly basis. To take pressure off the market offered Alemada Binanceto buy the FTT tokens over the counter at a price of $22 each. Binance now rejected the offer: “I think we will stay in the open market”, so CZ in a tweet. Binance will sell the tokens on the market itself in the coming months.

Investors are withdrawing positions from FTX

Uncertain about recent developments on FTX, investors are exiting the crypto exchange. As Ki Young Ju, CEO of CryptoQuant, announced via Twitter, the crypto exchange’s stablecoin reserves are at a yearly low of $51 million. According to Ju, stocks fell by 93 percent within two weeks. According to the analyst, payouts in ether have meanwhile reached an all-time high on FTX. The scale is gradually becoming apparent: over 900 million US dollars are from FTX within a week been deducted. Half of it in one day.