Following an announcement on Nov. 10 that FTX US may halt trading on its platform, on-chain data suggests that the platform has paused withdrawals from the United States-based platform on Nov. 11.
The original announcement on Nov. 10 cautioned users to “please close down any positions” while maintaining that its users would still be able to make withdrawals, as that will remain open.
Although the FTX CEO Sam Bankman-Fried, also known as SBF, remained insistent that FTX US was fine and had been unaffected by FTX liquidity issues, it appears things may have spiraled rapidly, as FTX US was included in a Chapter 11 bankruptcy filing in the United States.
On Nov. 10, Bankman-Fried assured FTX US users in an apology that “FTX US, the US based exchange that accepts Americans, was not financially impacted by this shitshow.” He added that the platform was “100% liquid” and that “every user could fully withdraw (modulo gas fees etc).”
To recap, FTX International’s liquidity issues were triggered within the last seven days when Binance CEO Changpeng “CZ” Zhao announced that Binance would liquidate the entirety of its FTX Token (FTT) holdings. CZ’s announcement inadvertently caused a bank run whereby FTX’s users attempted to withdraw funds only to discover that the exchange didn’t have enough liquidity on hand to meet the demand.
Since then, Bankman-Fried has resigned from his position as FTX CEO but will “remain to assist in an orderly transition” before being succeeded by John Ray.
FTX’s imminent collapse has invited much scrutiny of the crypto industry. Many global lawmakers and others are suggesting additional regulations for crypto firms, especially since FTX is the latest in a string of crypto-related bankruptcy filings in 2022.