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Cryptos Crumble as FTX Exchange Rumours Panic Traders

Bitcoin, ether slipped and FTX token plunged by more than 15% after investors were unnerved by talk of pressure on FTX’s financials

FTX has recovered over $7.3 billion in crypto assets, and has begun to think about its future, a lawyer told a US court on Wednesday.
FTX has recovered over $7.3 billion in crypto assets, and has begun to think about its future, a lawyer told a US court on Wednesday. File image: Reuters.


Cryptocurrencies took a dive on Tuesday with traders rattled over rumours surrounding the in-house token of major crypto exchange FTX.

The FTX token slumped by more than 15% after investors were unsettled by talk of pressure on FTX’s financials.

Bitcoin, the biggest cryptocurrency by market value, fell as much as 6% to $19,351, its lowest in two weeks, and was on course for its worst day in since mid-September. Ether, the next largest, fell over 5%.


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FTX has come under pressure after Changpeng Zhao, head of rival exchange Binance – the world’s largest – said on Sunday his firm would liquidate its holdings of the FTX token due to unspecified “recent revelations”.

FTX founder Sam Bankman-Fried said that the exchange was “fine” and that concerns were “false rumours”. The firm had no immediate comment when contacted by Reuters on Tuesday.

However the FTX token, which gives holders discounts on FTX trading fees, was last down almost 20% at $17.73, its lowest since early 2021.

Figures from analytics firm Nansen showed a one-day net outflow from FTX of about $630 million, suggesting account holders were also getting their money out.

“With FTT headed south, below a major support level … [there are] massive withdrawals out of FTX, across multiple assets,” said Justin d’Anethan institutional, sales director at digital asset firm Amber Group.

“It seems like investors are selling assets or withdrawing them out – probably will be a messy week.”


Leaked Balance Sheet

Crypto users had raised questions on Twitter last week about FTX’s token, following a report from news website CoinDesk about a leaked balance sheet from Alameda Research, a trading firm founded by Bankman-Fried that has close ties with FTX.

Reuters was unable to independently verify the accuracy of the report or the origin of the leaked balance sheet, but it seems to have at least rattled fragile market confidence.

“On-chain analytics show hundreds of millions being withdrawn from FTX over the last day,” said Matthew Dibb, chief operating officer of Singapore-based crypto investment manager Stack Funds.

“The question of solvency of FTX has been raised given recent events this year … however we don’t see any hard data as yet that would confirm this type of view.” 


  • Reuters with additional editing by Sean O’Meara


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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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