Sam Bankman-Fried’s cryptocurrency exchange FTX is seemingly undergoing intense withdrawal pressure, amid ongoing speculations that the company could be heading for insolvency. Although FTX hasn’t defaulted to process all withdrawal requests, the rate of outflows from the exchange is rather alarming and could push the exchange into a tight liquidity situation.
FTX’s stablecoin reserve is down over 93%
Recent on-chain data shared by CryptoQuant founder Ki Young Ju revealed that FTX’s stablecoin reserve has dropped to one-year. According to Ju’s tweet, the hefty stablecoins withdrawals from the cryptocurrency exchange represent a 93% decrease in its stablecoin reserve in two weeks. Similarly, the withdrawal requests for Ether on FTX skyrocketed to a new record level.
FTX hourly withdrawals for $ETH just hit an all-time high.https://t.co/KUY0bMepl3 pic.twitter.com/2NNechANVp
— Ki Young Ju (@ki_young_ju) November 6, 2022
Elsewhere, another on-chain analyst pointed out that FTX witnessed the largest stablecoin outflow, more than all cryptocurrency exchanges recorded within the past seven days. The reserve reportedly depleted by $300 million to a balance of $261 million, excluding the balance of the exchange’s United States arm, FTX.US.
Meanwhile, the stablecoin outflow from FTX is the largest among all exchanges in the last 7D.Down -$300M to a balance of $261M, excluding FTX US.If we exclude the inflow from Alameda, I am sure the number would get much uglier. pic.twitter.com/1Jm4wstgcD
— The Data Nerd (💙,🧡) (@theData_Nerd) November 7, 2022
Mostly from Alameda and Circle, several refill transactions have been made to FTX within the past few days as withdrawal requests surged. In some instances, the refills were drained within hours, which is indicative of how anxious FTX users have become in light of the speculations, propelled by the recent disclosure that Binance will liquidate about $500 million FTT (FTX token).
Popped up to $30M again, but once again not from a cold wallet.Instead, it looks like it came directly from being issued by Circle or a Circle account rather than a cold wallet with user funds.https://t.co/zujuOlWQoH
— Adam Cochran (adamscochran.eth) (@adamscochran) November 6, 2022
FTX swiftly processing users’ withdrawals, still
Earlier today, FTX confirmed massive withdrawal requests for stablecoins, including Bitcoin. On Twitter, FTX mentioned it’s “churning through” the Bitcoin withdrawals, with the nodes already reaching their capacity. However, they are “switching it to process from both ends, which should help speed it up.”
“We’ve already processed billions of dollars of deposits/withdrawals today; we’ll keep going. (Taking up anti-spam checks to process more–sorry if you got those. We’re hitting node rate capacity, and will keep going.) Also tons of USD <> stablecoin conversions going on,” Sam Bankman-Fried wrote in a separate tweet.
3: Stablecoins: processing. Banks are closed for the weekend, though; USD <> stablecoin creations/redemptions might be slower until wires clear tomorrow, especially for some coins/chains.
— FTX (@FTX_Official) November 7, 2022