FTX stops processing client withdrawals after deposit run - report

By Geoffrey Smith

Investing.com -- Cryptocurrency exchange FTX has suspended client withdrawals after suffering a massive run by its depositors, The Block reported on Tuesday citing its own blockchain analysis.

The Block reported that the last outgoing transaction from FTX took place at 06:37 ET (11:37 GMT) on the Ethereum blockchain.

If confirmed, the development would signify a dramatic turnaround for a company that had until recently styled itself as a savior of the cryptocurrency space, having bailed out a handful of platforms who had been wrong-footed by the collapse of the Terra/Luna network.

FTX's fall from grace began last week, when Coindesk published what it claimed to be a balance sheet from Alameda Research - a hedge fund majority owned by FTX CEO Sam Bankman-Fried - that appeared to show a massive overvaluation of FTX's native token, FTT.

The report triggered a wave of redemptions from the exchange, the most important of which was by rival and one-time collaborator Binance, which pulled nearly $600 million in funds at the weekend, according to its chief executive Changpeng Zhao.

On Monday, Bankman-Fried had claimed on social media that "a competitor is going after us with false rumors" and had insisted that the exchange and its assets were "fine".

He attributed lengthy delays in processing withdrawal requests to capacity bottlenecks.

FTT resumed its decline on the news, having dropped as much as 30% overnight before rebounding a little. By 09:30 ET, it was trading at $15.7975, down 29% on the day.

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