FTX reserves are under siege as crypto assets worth millions of dollars have been pulled off the FTX exchange, in the past couple of hours following FTXs’ decision to resume processing withdrawals on the platform. This was after halting said activities on Tuesday due to a liquidity crunch.
This update applies majorly to KYC users in the Bahamas, while most users are still unable to withdraw their funds from FTX, leading to speculation on Twitter that certain users or staff were getting preferential treatment.
FTX has turned on withdrawals but only for users in the Bahamas who are already KYC'd…
I'm sorry but that basically only applies to FTX employees and friends of the firm.
What a joke.
— Yano 🟪 (@JasonYanowitz) November 10, 2022
In the early hours of Friday, November 11th, 2022. Statelayer tweeted that lots of sizable withdrawals in USDT have been happening in the last few hours. It appears as though people are clamoring toward the Bahamas loophole.
This has led to a massive disappointment in the exchange as Employees seem to be charging people $100,000 to KYC as Bahama residents, so they can get access to their funds.
Approximately half of the Tether on FTX has been taken, in just a couple of hours. Some users were able to withdraw large amounts, which included $2.6 million worth of Ethereum, and another user pulled out around $1.3 million worth of USDC.
FTX recorded a withdrawal of over $360 million worth of BTC, which could be the activities of whales, which could put heavy pressure on the price of the currency.
This is reportedly the tenth-biggest BTC withdrawal this year, Nansen data also shows that FTX stablecoin outflows were the highest among exchanges over the past few days as reported by Data Nerd.
On Thursday, Rachel Lin, cofounder and CEO of Singapore-based decentralized exchange, SynFutures, said that crypto investors are now paranoid, and they have the right to be. With the shake-up of FTX, it’s natural that assets would be moving out of central exchanges. And that is a natural response that shouldn’t one as a surprise.
With the massive withdrawal spike and FTX on the verge of collapse, if FTX goes into bankruptcy, the exchange funds could be seized by an administrator to cover its debts and FTX consumers will likely become unsecured creditors.
