Market in Shambles as FTX Withdrawal Uncertainty Runs Rampant

Crypto markets are retracing in the wake of looming uncertainty about the state of FTX’s financials.

Reports are mixed about whether the exchange is able to process withdrawals, with some suggesting that it has halted them entirely. 

• On-chain data from Etherscan shows FTX’s last Ethereum-based outbound transaction took place on November 8th 10:59:35 AM UTC – more than 3 hours ago. The same can be said of the Tron and Solana blockchains. 
• Many users have also reported relatively slow Bitcoin withdrawal speeds over the past few days. FTX claimed yesterday that this was because its node is “throughput limited,” but that they would speed up withdrawals in due time.
• Later that day, FTX said it was “working tirelessly to process the backlog of withdrawals,” and that its queue was returning to “reasonable levels.” It has provided no additional updates since that time. 
• However, the sudden pause in on-chain withdrawals has much of the crypto community concerned, especially as Binance now plans to sell 23 million FTX tokens on the open market. 

All exchanges should have transparent proof of reserves, w transparent dashboards linking to on-chain data/wallets. Find it v difficult to believe FTX is insolvent, but having to trust some tweets is not good when the downside is possibly “you lose everything lol”

— Cobie (@cobie) November 7, 2022

• On-chain analysts at CryptoQuant and Nansen noted yesterday that withdrawal demand at FTX was skyrocketing, with over $400 million in net outflows from the exchange within 24 hours. 
• As of yet, no official statements have been made suggesting that FTX is insolvent. FTX CEO Sam Bankman-Fried denied rumors that his exchange was troubled on Monday, and has provided no updates since then.  
• As of Tuesday, Bitcoin is back below $20,000, while Ethereum is below $1500 again. FTX token is down 31% on the day to just $15 apiece.