Is FTX.US liquid? Subsidiary may halt trading despite SBF’s assurance that exchange is ‘100% liquid’, ‘fine’
After facing extreme turbulence, the FTX group has filed for Chapter 11 bankruptcy, which includes both its main exchange and its US branch.
The bankruptcy was announced on 11 November 2022, despite founder and ex-CEO Sam Bankman-Fried previously having stated that FTX.US would be unaffected by the chaos.
Yet, just hours after Bankman-Fried reassured investors on Twitter, a red warning appeared on the FTX.US main page cautioning users that “trading may be halted”.
Since then, the exchange’s founder has resigned from his position as CEO.
This move followed withdrawal mayhem on FTX’s main exchange. A mass migration of consumers had taken place, which started with more than $5bn of withdrawals from FTX on Sunday. Withdrawals were later reported as sluggish and at points halted.
FTT to USD
Is FTX.US next?
FTX.US warned investors on 10 November that it could be stopping trading on its site, and that users should stop out of any positions. This warning was later followed by the announcement that the US-based exchange would be closing up shop along with the rest of the FTX Group, as it had filed for bankruptcy.
The red announcement banner said: “Trading may be halted on FTX US in a few days. Please close down any positions you want to close down. Withdrawals are and will remain open. We will give updates as we have them.”
The FTX.US homepage with its trading alert – Credit: FTX.USDespite claiming users who want to cash out will be unaffected, the FTX official Twitter account revealed it had briefly paused ETH and MATIC withdrawals.
It tweeted on 11 November: “ETH withdrawals will resume shortly, our apologies on the delay.”
FTX US withdrawals:
— FTX (@FTX_Official) 11 November 2022
ETH withdrawals will resume shortly, our apologies on the delay
Matic - if you would like to withdraw Matic please cancel your withdrawal and request it as erc20 Matic
FTX’s liquidity crunch
Bankman-Fried had tweeted that FTX.US would not be “financially impacted by this shitshow”. He said that the US branch was “100% liquid”, and that users would be able to fully cashout without any issues.
However, this was prior to FTX’s filing for bankruptcy. The press release said it would begin “an orderly process to review and monetise assets for the benefit of all global shareholders”.
These developments are the latest in what has been a challenging period for FTX and its users. A surge in customer withdrawals, combined with the collapse of the exchange’s native token FTT, sparked a liquidity crisis for FTX and ultimately led to its downfall.
FTX is now seeking to return money to its investors, but the timeline for this has not been confirmed as its new bankruptcy team was only recently appointed.
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