FTX seems to fall deeper into its despair pit without any anchor. The crypto exchange is facing several issues threatening the stability of the firm. First, there appears to be an ongoing war between FTX and the Binance crypto exchange. This is presumed to involve their respective CEOs, Sam Bankman-Fried (SBF) and Changpeng Zhao (CZ).
Binance announced its plans to liquidate FTT token holdings, which it has carried out. There’s still no explanation for Binance’s sudden lack of interest in the FTT tokens. However, some opine that Binance may consider holding FTT tokens as a liability on its record.
Following Binance’s liquidation of FTT tokens, things are becoming more complicated for FTX. The latter now suffers delays in processing Bitcoin and stablecoins transfers for its clients. The natural outcome of events is reducing users’ confidence in FTX.
FTX is currently witnessing the collapse of its Ethereum (ETH) reserves. According to data provider, CryptoQuant, the exchange has lost almost 300k ETH over the past two days.
At the moment, the Ethereum reserve of FTX is about 108,246.43. This stands as one of the vast drops recorded since November 2020.
FTX Makes Moves To Fix ETH Reserves
Reports on the situation revealed that FTX is making some moves to build up its ETH reserve. The firm is using its subsidiaries and other crypto exchanges. For example, Nansen data disclosed that Alameda, owned by SBF, has transferred 26,600 ETHs to FTX within the past day.
This transfer left Alameda with a balance of 9,325 ETH. Also, Alameda has sent vast amounts of stablecoins to FTX hot wallet using other crypto exchanges.
As per data from PeckShieldAlert, FTX has removed liquidity of 1,985 ETH from Gearbox Protocol. Also, Blockfolio, another SBF company, transferred about 13,555 ETH to FTX.
Currently, the crypto exchange’s node throughput is limited, making it challenging to process Bitcoin withdrawals. Also, users of the FTX platform now complain that transaction delays for 5 to 10 hours before executions.
Additionally, the creation and redemptions of stablecoins from the exchange have slowed. But the exchange blames banks for the slowdown in stablecoins creations and redemptions. It mentioned that wire transfers would clear on Monday once banks have opened.
FTT Tokens Dips By 10%
The CEO of Binance crypto exchange, CZ, announced the firm’s plan to liquidate its FTT holdings. CZ mentioned that the action would commence in the next coming months. This announcement negatively impacted FTT as the token dipped by 10% over the past 24 hours. The coin even hit a low of $22.32.
However, FTT has started showing signs of recovering due to little volatility in the crypto market. At the press time, FTT is trading at $22.33.
Featured Image From Pixabay, Charts From Tradingview