FTX cryptocurrency exchange clients want to withdraw billions of dollars, but their funds have run out

Clients of FTX, the third largest cryptocurrency trading exchange, want to withdraw billions of dollars of assets from it, but their funds have disappeared. At least $1 billion was withdrawn in a series of cryptic transactions from the company, which filed for creditor protection on Friday.

On Friday, FTX Trading Ltd. filed for bankruptcy protection in the United States. Sam Bankman-Fried, founder and CEO of the exchange, has resigned. He was replaced by John Jay Ray III.

The creditor protection application includes, among others: the Alameda Research Foundation, as well as about 130 related companies.

Prior to filing, clients were requesting a withdrawal of $6 billion within 72 hours, and rival exchange Binance abandoned its FTX bailout plan.

On Saturday, FTX reported the discovery of unauthorized transactions that resulted in millions of dollars worth of assets being withdrawn from the platform under suspicious circumstances.

Sources told Reuters that at least $1 billion of client funds have disappeared from the exchange. Other sources say up to $2 billion has disappeared from FTX’s accounts.

Reuters also writes that FTX founder Sam Bankman-Fried was to transfer $10 billion of client assets to his trading company Alameda Research. Most of these assets have also disappeared.

FTX General Counsel Ryan Miller tweeted that over $2 billion has been withdrawn from FTX International and FTX US in the last 7 days and $659 million in the last 24 hours.

The collapse of FTX shocked investors, who again called for regulation of the cryptocurrency sector, which has been losing money this year due to a strong sell-off in the markets.

After Binance rejected a rescue deal with FTX on Wednesday, Bitcoin fell below $16,000 for the first time since 2020. This is a decrease of more than 75%. compared to a record level of 69 thousand. USD for November 2021.

“We believe that crypto markets remain too small and too isolated to cause contagion in financial markets. Their market capitalization is $890 billion compared to $41 trillion for US equities,” Citi analysts wrote.

In four years, FTX has raised $1.8 billion in venture capital and pension funds.

In its bankruptcy filing, FTX Trading wrote that it has $10 billion to $50 billion in assets, $10 billion to $50 billion in liabilities, and over 100,000 assets. creditors. (PAP Business)