Users Flee FTX? Exchange Sees 47% Drop In On-Chain Balance
07 Novembre 2022 - 3:23PM
NEWSBTC
The crypto industry is witnessing a new war between exchange giants
FTX, led by Sam Bankman-Fried, and Binance-led Changpeng “CZ” Zhao.
Over the past week, rumors emerged about the former exchange
becoming insolvent and holding an illiquid balance sheet.
Related Reading: Tron Transaction Volume Balloons To 5.3 Million In
Q3, But There’s Still Doubts Ahead The Binance CEO seems to be
fulling speculations. During the weekend, CZ expressed concerns
about “recent revelations” around FTX. In 2021, Binance invested
FTX and received around $2 billion in BUSD, and the Bankman-Fried
supported token FTT. Now, Binance will sell its FTT tokens
and liquidate any participation and equity in its competitor. The
decision was controversial as CZ constantly speaks about different
actors working together to grow the crypto industry. This time is
different for the executive, via Twitter CZ wrote: Regarding any
speculation as to whether this is a move against a competitor, it
is not. Our industry is in it’s nascency and every time a project
publicly fails it hurts every user and every platform (…). Running
The FTX Bank Despite CZ’s statement, the decision is considered
part of a “Bank Run,” when many customers withdraw their money from
a financial institution leading to insolvency, against the
Bankman-Fried led FTX. So far, the strategy is working. Data
from Dune Analytics indicates that the 24 hours NetFlow for FTX is
negative. In other words, people withdraw their tokens more than
they deposit them. The platform has seen a negative $26 million in
Netflow. As seen in the chart below, stablecoin USDC
dominated the Netflow. This metric trended to the downside with the
rumors of insolvency. On higher timeframes, the Bank Run worsens
with FTX recording -$86 million weekly Netflows and -$230 million
in 30 days. In the meantime, Binance began its attack on FTT. The
token has been following the general sentiment in the market, but
now it’s experiencing further selling pressure. In this
context, when Binance takes the short side of the trade in a crypto
bear market, who will bet against them taking the long side? FTT
seems poised for further losses in the coming months. We will
try to do so in a way that minimizes market impact. Due to market
conditions and limited liquidity, we expect this will take a few
months to complete. 2/4 — CZ 🔶 Binance (@cz_binance) November 6,
2022 Sam Bankman-Fried Clears The Air Via Twitter, Sam
Bankman-Fried addressed recent events claiming that a competitor is
trying to attack them with “false rumors.” In that sense, the
executive assured his followers that FTX is “fine” and solvent.
Bankman-Fried wrote: 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. It’s heavily
regulated, even when that slows us down. We have GAAP audits, with
> $1b excess cash. We have a long history of safeguarding client
assets, and that remains true today. Related Reading: Solana
Plunges 12% – Is FTX Selling Its SOL To Defend FTT? Bankman-Fried
called on CZ to work on a compromise and try to “work together for
the ecosystem.” Binance is yet to reply, but CZ seems adamant in
his position.
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