Earlier, FTX’s founder, Sam Bankman-Fried, quelled fears of illiquidity by assuring customers that deposits and withdrawals are functioning normally. While customers were having issues withdrawing their Bitcoin from the cryptocurrency exchange, FTX announced that its matching engine was functioning normally.
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Because of this congestion, Bitcoin (BTC) withdrawals are also problematic. Until banks open, you won’t be able to withdraw stablecoins.
Liquidity Problems for FTX Due to Bitcoin and Stablecoins
In a series of tweets published on November 7th, cryptocurrency exchange FTX stated that all systems, including the matching engine, are operating normally. Although FTX’s Bitcoin withdrawals are throughput capped, problems persist. The Bitcoin withdrawal process at the cryptocurrency exchange is being streamlined by switching to two-way processing.
Withdrawals in Bitcoin
Withdrawals in Bitcoin (BTC) are being processed at a rapid pace because the throughput of the node is limited. We’re now processing it from both ends, which should make the whole thing go more quickly.
Users of the FTX exchange reported that Bitcoin transactions have been blocked for 5-10 hours. People keep drawing parallels between the current FTX and Alameda liquidation and the previous liquidity crisis, fueling the spread of fear, uncertainty, and doubt.
The crypto exchange has also informed its customers of the difficulty of redeeming stablecoins. Until banks begin clearing wire transactions, the creation and redemption of stablecoins may be slowed, it was suggested. FTX stores its capital in banks, then converts it to stablecoins when needed.
The crypto market is starting to feel the effects of the FTT liquidations and withdrawal freezes. The token’s value, measured in FTX, has fallen about 5% in the last day, to $22.50.
FTT Tokens Being Dumped by Binance
On November 6th, Binance CEO “CZ” stated the company would be selling all of its FTX Tokens (FTT) over the course of the following few months. To the tune of $2.1 billion in FTT and BUSD, Binance cashed out of FTX shares last year. Since the company has already transferred $584 million in tokens, the FTT price has dropped by much than 10%.
Meanwhile, a number of Alameda-related deals are popping up on Twitter. In the midst of a big drop in ETH holdings at the crypto exchange, evidence shows that both Alameda and Blockfolio transferred large amounts of ETH to FTX.
Source: Google Trend