FTX’s US operation, which CEO SBF insists is independent, has announced that trading may be suspended soon due to a lack of liquidity.
In brief
- On Thursday, FTX US warned its customers that trading may be suspended “in a few days.”
- FTX is trying to avoid bankruptcy by raising capital amid a severe cash shortage.
FTX US Warns Users
Despite FTX’s liquidity crisis and apparent unraveling this week, CEO Sam Bankman-Fried has maintained that FTX US is a separate company from FTX’s global business and is doing fine. Users of FTX US have been issued a warning that their account access may be terminated in the near future.
Trading on FTX US may be suspended in the coming days, the company warned its customers in a message posted to the site’s homepage this morning. If you have any open positions that you would like to close, please do so now. The option to make a withdrawal is currently available, and will remain so. When new information becomes available, we will share it with you.
Decrypt tried to contact a representative from FTX to find out if withdrawals would still be possible in the event of a trading halt, but did not receive a response right away. In response to a tweet, the official FTX account confirmed that withdrawals were being processed normally.
Bankman-Fried took to Twitter early on Thursday to discuss his plans to save FTX from its crisis this week and to reaffirm that FTX US is a separate entity from FTX proper, where operations are continuing as usual.
The exchange based in the United States that is willing to deal with American customers, FTX US, “was not financially impacted by this shitshow,” he wrote. It’s completely liquid.” Each and every user has the option to withdraw entirely.
SBF Says He Will Wind Down Alameda and Spend the Week Trying to Raise Money for FTX
On Thursday morning, FTX CEO Sam Bankman-Fried announced on Twitter that he is closing down trading at Alameda Research while he and his team “doing everything we can to raise liquidity”
FTX US and the international FTX.com business have been treated as two separate entities, but in reality they are deeply intertwined. For instance, FTX’s primary logo has been used extensively in sponsorship deals across the US; some of these deals have been struck directly with FTX and FTX US.
Bloomberg reported on Wednesday that the SEC and CFTC in the United States are looking into FTX and how it handled customer funds, as well as the relationship between FTX and FTX US.
Also, prior to Bankman-public Fried’s tweets, allegedly leaked Slack messages from the CEO surfaced, in which he proposed a possible fundraise that would inject funds into both FTX and FTX US simultaneously.
Letter From Zach Dexter
Earlier today, Zach Dexter, CEO of FTX US Derivatives, reassured customers in a letter that their money was safe within the company’s licensed derivatives exchange business and that it would “soon be entirely separate” from the “FTX family of companies.”
Unfortunately, FTX’s future is not clear at this time. Binance, an alternative exchange, announced on Tuesday that it had signed a non-binding letter of intent to acquire FTX. However, on Wednesday, it backed out of the deal, citing the severity of FTX’s liquidity crisis as the reason. Bankman-Fried is currently trying to raise capital in order to save the company, avert insolvency, and repay creditors.
Disclaimer: This isn’t financial advice; it’s just for education. Crypted Crypto can’t guarantee its accuracy. Every investment and trade carries some risk, so always do your own research. Invest only what you can afford to lose.
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