The recent transfer of $500 million worth of FTX (FTT) tokens to Binance has caused a lot of skepticism about the crypto-currency exchange’s finances. However, FTX CEO Sam Bankman-Fried assured that all operations are working well, but investors hit the panic button.
In addition to the liquidation of FTT, users are removing major altcoins like Ethereum from FTX’s main portfolio. According to on-chain data, in the midst of the Binance drama, more than 90% of Ethereum (ETH) has been removed from FTX’s main portfolio. The on-chain data provider Santiment reports :
In just two days, the amount of #Ethereum held in #FTX’s main portfolio dropped from 322,000 to 32,000. At one point, the portfolio was losing $500 ETH per minute. With the ongoing feud between @SBF_FTX and @cz_binance, expect continued unpredictability.
😮 In just two days, the amount of #Ethereum held in #FTX‘s main wallet has dropped from 322k to 32k. At one point, the wallet was bleeding 500 $ETH per minute. With the ongoing feud between @SBF_FTX and @cz_binance, expect continued unpredictability. https://t.co/vILMoySIEu pic.twitter.com/ROQt7wxj0c
– Santiment (@santimentfeed) November 7, 2022
The crypto winter of 2022 has seen many players freeze user withdrawals. This has led to serious concern within the crypto community. As a result, any negative sentiment leads to a strong reaction, as seen in the case of Ethereum withdrawals from FTX.
3) 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.
– SBF (@SBF_FTX) November 7, 2022
FTX chief Sam Bankman-Fried assured that things were working well. In a tweet yesterday, he wrote. :
“A competitor is trying to attack us with false rumors. FTX is fine. Assets are fine. FTX has enough to cover all customer assets. We are not investing customer assets (even in Treasuries). We have processed all withdrawals, and we will continue to do so.
It’s very regulated, although it slows us down. We have GAAP audits, with a cash surplus of over $1 billion. We have a long history of protecting customer assets, and that remains true today.”
Binance confirms its holdings in Ethereum
While massive ETH withdrawals are taking place on FTX, Binance’s CEO seized the opportunity by adding that they have more than $8 billion in ETH deposits across the two cold wallets. “It’s not our money. It’s the users’ assets. We are only the custodian“, he added.
#Binance has about $8 billion ETH in our cold wallets 1 & 2.
– CZ 🔶 Binance (@cz_binance) November 7, 2022
Not sure if CZ was trying to lure FTX users with its statement. The price of the FTX token has plunged another 20% in the past few hours amid a massive price drop. At press time, Ethereum (ETH) is also trading down 8.4% at $1451, with a market cap of $178 billion.