The crisis surrounding FTX and its underlying token, FTT, is intensifying in the cryptocurrency community as one of the major exchanges in the world’s trading activity appears even more suspicious than it did a few days ago.
According to Binance CEO Changpeng Zhao, they obtained $2.1 billion in BUSD and FTT tokens from their early investment in FTX. As a result of SBF’s immoral practices, they intend to sell their digital holdings. In the following one to two months, they intend to disperse assets valued at $600 million on the open market.
CZ’s Gameplan or Fair Play?
Despite CZ’s claims, the decision made against the Bankman-Fried led FTX is considered as part of a “Bank Run,” which occurs when numerous clients remove their money from a financial institution, ultimately causing it to fail. The plan is working thus far.
According to data from Dune Analytics, FTX’s 24-hour NetFlow is negative. In other words, more tokens are being withdrawn than being deposited. Netflow on the platform has been negative by $26 million.
The stablecoin USDC dominated the Netflow, as shown in the graph below. With the insolvency rumors, this metric began to slide downward. In more extended time frames, the Bank Run becomes worse, with FTX registering weekly net flows of -$86 million and 30-day net flows of -$230 million.
Sam Bankman-Fried Clears The Air
Sam Bankman-Fried responded to recent events on Twitter and claimed that a rival is attempting to discredit them with “false rumors.” The boss reassured his followers that FTX is “fine” and solvent in that regard. 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.