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FTT price crashes after rumors of possible bankruptcy

Speculation about a bankruptcy of the crypto exchange FTX has led to a massive dump of the FTT token.

By Finst News
• 5 min read
FTT price crashes after rumors of possible bankruptcy

Speculation about a bankruptcy of the crypto exchange FTX has led to a massive dump of the FTT coin. The price fell by as much as 25 percent.

After Binance announced it would sell off its entire FTT holdings, pressure on the crypto exchange FTX intensified. The price of the FTT token plummets, investors pull their funds from FTX, and there are concerns about larger payouts. Market concerns about the exchange's bankruptcy are rising.

A line with X: FTX

It all started last Sunday, November 6, with a tweet from Binance CEO Changpeng "CZ" Zhao. Binance had decided to "sell all remaining FTT on our books". The reason was "recent disclosures that have come to light," Zhao said, which fueled the bankruptcy rumors about FTX with the short post. This was preceded by a report from CoinDesk. According to the report, Alameda Research's current holdings are largely made up of the FTT token. Alameda Research was founded by FTX CEO Sam Bankman-Fried.

Alameda's foundation largely consists of a coin invented by a sister company, the report said. The scenario: if the FTT token collapses, Alameda's reserves would melt away — and FTX could slide into bankruptcy.

Binance rejects Alameda's bid

The news triggered a major dump in the crypto market. FTT fell 25 percent from the previous day. The token was at $17 — down 35 percent on the week. To ease the market pressure, Alameda offered to buy the FTT tokens off-exchange for $22. Binance has since rejected the offer: "I think we stay on the open market," CZ said in a tweet. Binance will start selling the tokens on the open market over the coming months.

Investors are pulling positions from FTX

Spooked by the latest FTX developments, traders are pulling their positions from the exchange. As Ki Young Ju, CEO of CryptoQuant, tweeted, the exchange's stablecoin reserves are at a one-year low of $51 million. Within two weeks, interest has fallen by 93%, Ju said. Meanwhile, Ether withdrawals have hit an all-time high on FTX, the analyst says. Gradually, the full picture is coming into focus: more than $900 million has been withdrawn from FTX in a week. Half of that was pulled in one day.

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