The situation is becoming increasingly hopeless for the crypto broker FTX, which is in liquidity trouble. A takeover by the competitor Binance has failed, the next step will probably be the insolvency administrator.
The bad news about the ailing crypto exchange FTX does not stop. The Bahamas Securities Commission announced that it had frozen assets of FTX Digital Markets. Next, an insolvency administrator could take over the settlement. The supervisory authority has already submitted a corresponding court application.
The imbalance of the large trading platform for digital currencies such as Bitcoin has kept the crypto market in suspense for days. Many customers fear for their money. FTX Digital Markets is a Bahamas-based company from US entrepreneur Sam Bankman-Fried’s crypto empire and operates the struggling crypto exchange FTX.com. According to the securities regulator, the company is suspected of having embezzled customer funds.
FTX.com had run into liquidity problems after enormous withdrawals of funds. On Wednesday it initially looked as if the competitor Binance would take over the company. But this plan failed. Without a huge injection of cash, FTX.com now faces bankruptcy. The crypto platform ran into payment difficulties on Sunday after doubts about capital reserves led to customer flight and billions in funds being withdrawn.
Meanwhile, FTX users in the US are also getting more and more nervous. In fact, FTX’s international and US operations are separate. Bankman-Fried took to Twitter on Thursday to try to calm the situation, claiming that FTX.US is “100 percent liquid”. At the same time, the platform announced that it might suspend trading for a few days. US media also reported that employees in the US were trying to sell parts of the company in a kind of distress sale.
The situation is becoming increasingly critical for customers and investors. Unless Bankman-Fried surprisingly finds a few billion dollars somewhere, at least FTX.com should be beyond rescue. The 30-year-old crypto entrepreneur had assured on Tuesday that all deposits were protected and would be paid out in full. He dismissed rumors of a shortage of money as false. Bitcoin benefited from the general recovery on the financial market on Thursday and was most recently at just under $17,500. On Wednesday, concerns about FTX had pushed it to a two-year low below $16,000.
