Crypto exchange FTX is rapidly losing stablecoin liquidity after Binance CEO Changpeng Zhao (CZ) announced his company’s full exit from its FTT position on Sunday.
ETH withdrawals from FTX have also tapped an all-time high, possibly signaling worry among depositors about the safety of their funds.
FTX Withdrawal Wave
According to a tweet thread from CryptoQuant CEO Ki Young Ju, FTX currently has $104.9 million worth of stablecoins in its on-chain reserves. Yesterday, he reported a figure of just $51 million – a 93% decline over a two-week period, and a yearly low.
Ju provided supporting data from Nansen on Monday, which indicated that FTX’s stablecoin reserves were at just $93 million. It also showed that the exchange had processed over $450 million in net outflows over the past 24 hours and nearly $700 million in the past 48 hours.
While FTX was losing depositors, Binance appeared to gain roughly $411 million in exchange inflows over the same time period.
“FTT token reserves across all exchanges reached an all-time high,” added Ju. “60% of the circulating supply is in exchanges.”
FTT is FTX’s native crypto token which provides a number of benefits to holders at the exchange. The token fell by 10% over the weekend after CZ confirmed that Binance would fully exit its FTT position, worth $584 million in total.
CZ said that selling off FTT was a form of “post-exit risk management,” in response to “recent revelations that have come to light.” He added that his company wouldn’t “support people who lobby against other industry players behind their backs.”
The company plans to offload that position gradually over the next few months in order to minimize the impact on the market.
Fears Swell Around FTX
CZ’s comments and the ensuing FTX withdrawal wave have sparked fear across crypto Twitter, with many significant voices telling FTX users to withdraw their funds.
FTX CEO Sam Bankman-Fried (SBF) has denied that his exchange is in any type of financial trouble, and is fully capable of processing withdrawals.
Alameda – another company owned by SBF – is also getting its financials questioned given its apparently large exposure to FTT. The company head has offered to buy as much FTT from Binance as its willing to sell.
The firm also appears to be transferring stablecoins to FTX’s hot wallet.
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