There are concerns that cryptocurrency exchange FTX is facing a liquidity crisis as its native token plummets.
At the time of writing (7am UK) FTX Token had (FTT) fallen 22% in the previous 24 hours to $17.14 – although it had regained 9% in the last hour – leaving it 35% down over the course of a week.
There are suggestions that the drop is linked to recent reports from CoinDesk that a notable portion of its sister investment fund Alameda Research’s balance sheet was made up of FTT and Solana’s SOL token. Around 60% of FTT’s supply is currently held on exchanges.
Since then there has been an exodus of stablecoins from FTX – more than $450 million in a week – while rival Binance has seen an inflow of more than $400m in the same time period.
Users have reported delays on fiat currency withdrawals from FTX, but the exchange says there is no risk of withdrawals being halted.
FTX is backed by world-leading VCs Temasek, BlackRock, Coinbase Ventures and Sequoia Capital.
Its CEO Sam Bankman-Fried blamed the turbulence on Binance and its CEO Changpeng Zhao, who has said that he plans to liquidate any remaining FTT on Binance’s books – reported to be worth more than $500m.
“A competitor is trying to go after us with false rumors,” he tweeted. “FTX is fine. Assets are fine. FTX has enough to cover all client holdings.
“We don’t invest client assets (even in treasuries)… we have a long history of safeguarding client assets, and that remains true today.
“I’d love it, @cz_binance, if we could work together for the ecosystem.”