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Is El Salvador headed for bankruptcy because of FTX? The rumor says yes

Rumors are swirling: El Salvador reportedly had its Bitcoin holdings on FTX.

By Finst News
• 4 min read
Is El Salvador headed for bankruptcy because of FTX? The rumor says yes

The rumors swirl: El Salvadorr reportedly had its Bitcoin holdings on FTX. Is it just FUD or is there truth to it?

It's a unique situation in the crypto market. FTX is facing liquidity problems, and customers are worried about their capital, while CEO Sam Bankman-Fried (SBF) used about $4 billion to bail out his crypto firm Alameda Research — including customer funds that can’t access their capital anymore. Meanwhile, Binance CEO Changpeng "CZ" Zhao and Tron founder Justin Sun are negotiating over the exchange's new location.

Between that, the crypto industry on Twitter is also dropping bad news: El Salvador reportedly parked all state-purchased Bitcoin on the now-bankrupt crypto exchange FTX and can’t access it. According to rumors, President Bukele demanded the extradition of FTX boss Sam Bankman-Fried to El Salvador. Pure chaos, but what’s really going on?

The rumors around El Salvador and FTX

"I don’t know if it’s true that El Salvador’s crypto holdings are on FTX." Billionaire Mike Novogratz may have fueled the rumors on Twitter. In an interview with CNBC, the Galaxy Digital founder commented on the events around FTX, Binance, and Sam Bankman-Fried.

Really not, Novogratz said just on CNBC that he heard El Salvador’s crypto was on FTX and that they were calling for SBF’s extradition 😭

  • db (@tier10k) 10 November 2022

According to the news portal DB News, Nayib Bukele tweeted. "We demand the immediate extradition of SBF and Trabucco. FUD (Fear, Uncertainty and Doubt), memes and eerie jokes about the president of the Pacific Coast nation followed."

Changpeng "CZ" Zhao sticks to his stance

The Binance CEO came back to us shortly after with news that his thoughts had shifted with President Bukele. According to CZ, he explained that El Salvador "has no Bitcoin on FTX" and "no business" with the exchange.

But the story goes further. In the meantime, Mike Novogratz has also revisited his post on X, apologized to Nayib Bukele, and thanked the Binance CEO for the clarification. The claim that the Salvadoran president had parked his country’s Bitcoin on FTX has thus been debunked.

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