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FTX withdrawals: How to access frozen funds in SBF’s stricken exchange amid severe liquidity squeeze

By Daniela Ešnerová


Updated

The FTX platform logo displayed on a mobile phone
Only FTX users registered in the Bahamas - where the company is headquartered - were able to make withdrawals. – Photo: Shutterstock

The embattled cryptocurrency platform FTX resumed processing limited withdrawals for several hours on Thursday, on-chain data, published by cryptocurrency intelligence platform Arkham Intelligence, showed.

However, only FTX users registered in the Bahamas - where the company is headquartered - were able to make withdrawals, FTX later said via Twitter.

A couple of hours later, the Bahamas securities regulator froze the assets of FTX Digital Markets Ltd. The watchdog also added it suspended FTX registration and applied to the Supreme Court of The Bahamas for the appointment of a provisional liquidator FTX Digital Markets Ltd.

On Friday, the FTX Group said in a statement that FTX, its affiliated trading fund Alameda Research, and 134 other companies have commenced voluntary Chapter 11 bankruptcy proceedings in Delaware. FTX founder and CEO Sam Bankman-Fried has resigned from his role.

FTX token (FTT)

The news was first reported by a crypto intelligence platform Arkham Intelligence.

“FTX appears to be processing withdrawals – in a limited capacity as of right now $2.61m in $ETH transferred out in the last 10 minutes,” tweeted Arkham at 15:50 UTC with a screenshot showing the transcations.

DOGE/USD

0.13 Price
+6.990% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

XRP/USD

0.60 Price
+3.070% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BTC/USD

67,351.45 Price
+0.510% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

SOL/USD

174.39 Price
+2.440% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

‘Try your luck. See if you can get out’

Following Arkham’s alert, other crypto market watchers recommended FTX clients should try to withdraw their funds.

 “FTX are processing withdrawals of various different sizes. If you have money stuck, try your luck and see if you can get out. God speed,” tweeted Aylo 16:53 UTC.

However, others reported that their withdrawals were still pending. “I’ve had withdrawals pending. And tried new ones. Nothings happening. Anyone had any luck?” asked Twitter user Mayne.

After hours of silence from the FTX on the sudden resuming withdrawals, FTX published the following statement: “Per our Bahamian HQ's regulation and regulators, we have begun to facilitate withdrawals of Bahamian funds. As such, you may have seen some withdrawals processed by FTX recently as we complied with the regulators.”

But only a couple of hours later, The Bahamas Securities Commission froze all assets of FTX local subsidiary, FTX Digital Markets “and related parties.”

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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