Firms are withdrawing Ethereum, Alts from FTX: Should investors panic?

A few hours back, Changpeng Zhao revealed that Binance will start liquidating its FTT HODLings post “recent revelations.” The largest exchange’s executive, however, clarified that his company was “not against” anyone, but at the same time, wouldn’t support people who “lobby against other industry players” behind their backs.

Read More: Binance will liquidate its FTT tokens after ‘recent revelations’

On the news of the same, outflows on the exchange started rising and prominent firms started withdrawing assets from FTX. Blockchain security firm and analytics platform PeckShield revealed that ~$40.4M USDC had been transferred from FTX to Jump Trading over the past 24 hours.

In another transaction, around $94 million worth of crypto had been transferred from the exchange to Nexo. The same included $73.9 million worth of Ethereum. Additionally, other tokens like SAND, FTM, AXS, MKR, LINK, and MATIC were also moved out of the exchange. In another tweet, PeckShield revealed that roughly another ~10k $ETH [worth ~$15.9 million] was transferred from FTX.

Parallelly, FTX’s sister company Alameda was seen sending stablecoins “in size” to FTX. After receiving deposits from Circle, it deposited them on FTX. Over $257 million has already been sent.

Flipping to tails, ‘The Data Nerd’ further went on to reveal that the stablecoin outflow from FTX was the largest among all exchanges over the past week, likely pointing towards the FUD withdrawals by market participants. If the transfers from Alameda were eliminated from the equation, the picture would allegedly be “much uglier.”

FTX to “welcome” everyone back

Alongside the withdrawals of the aforementioned companies, a host of other addresses also joined the herd and pulled out assets including ETH, stETH, and USDC from the platform. However, it should also be noted that FTX also registered inflows into the exchange, including that from Jump Trading involving USDC. The withdrawals, nevertheless, stood at a much-elevated level.

On a question with respect to whether or not Jump Trading was withdrawing its assets from FTX because of the Binance news, ‘Nansen Intern’ clarified that such behavior was “pretty standard,” and not essentially out of the blue because the firm “constantly deposits and withdraws on exchanges.”

Addressing the rumors circulating, FTX founder Sam Bankman-Fried clarified that the company “keeps audited financials.” He also went on to chalk out that withdrawals and deposits were working fine and the exchange had already processed “billions of dollars” worth of transactions.

Further shedding light on the current state of affairs, including stablecoin conversions, he tweeted,

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, will keep going.) Also tons of USD <> stablecoin conversions going on.

He also added that when this episode “blows over,” the company will “welcome” everyone else back.

And in the end, you should do what you want, and trade where you want. We’re grateful to those who stay; and when this blows over we’ll welcome everyone else back.