EU license threatened by asset freeze fueling crisis. Sam Bankman-Fried, the founder of the FTX cryptocurrency exchange, is under investigation by the US Securities and Exchange Commission. Marina Markezic, co-founder of the European Crypto Initiative, noted that the collapse of FTX will have indirect consequences and “a huge impact on the formation of crypto-regulation.”
- The Bahamas Securities Commission has frozen the assets of FTX Digital Markets (FDM) and affiliates and suspended the company’s license in the country. FTX Digital Markets is a subsidiary exchange headquartered in the Bahamas. FTX US is a separate company.
- Tether Limited, at the request of law enforcement, blocked 46,370,701 USDT on the Tron blockchain owned by the FTX cryptocurrency exchange. This is the first time that the freeze has affected the funds of the crypto exchange.
- The Japan Financial Services Authority has ordered the local branch of the FTX exchange to suspend operations and enter a close-only mode (users can close positions, but cannot open new ones).
- The Crypto.com cryptocurrency platform has suspended deposits and withdrawals in USDC and USDT stablecoins on the Solana blockchain. The company cited “recent developments in the industry.”
- BlockFi has suspended withdrawals due to the FTX crisis. Lending platform BlockFi said it would not be able to conduct business as usual and would restrict operations due to a lack of clarity regarding the status of FTX and Alameda Research. BlockFi has also advised users to refrain from making deposits to wallets and interest-bearing accounts.
Consequences for the company’s exchange itself and its founder:
According to Reuters, Sam Bankman-Fried discussed the fundraising with TRON Foundation founder Justin Sun and the management of Sequoia Capital and Tether Limited.
The agency reported that the “hole” in the balance sheet is $9.4 billion, which is higher than the $8 billion that Bloomberg and WSJ had.
According to Axios, FTX also reached out to Kraken, but negotiations ended to no avail.
FTX Loses Future Fund Team and Head of Institutional Sales
The FTX Institutional Sales team was not aware of the potential insolvency of the cryptocurrency exchange during the current week. This was stated by the head of the team Zane Tackett (Zane Tackett), reports The Block with reference to his letter to customers.
The team behind the Future Fund, a structure set up to invest up to $1 billion in “ambitious projects to improve humanity’s long-term prospects,” also announced a complete shutdown.
Also, one of the employees spoke about the “ruined lives” of FTX employees, posting on Twitter about the mood of the team.
Briefly about what happened:
- Last week, an article appeared in the media that Alameda Research does not have financial support.
- At the beginning of the week, Binance threatened to “drain” its assets to FTT, and CZ accused a competitor of dishonest behavior.
- FTX urgently began looking for investors. Bankman-Fried reassures users. The exchange froze the withdrawal of funds several times.
- FTX is being turned down by Wall Street and Silicon Valley venture capitalists.
- Binance refers to the financial problems of the exchange and withdraws from the deal. All this time, the market was accompanied by an outflow of gigantic capital. The rate of cryptocurrencies is falling.
- FTX was “under the gun” of the American authorities.
- On the morning of Thursday, November 10, the FTX website is down. Bankman-Fried does not respond to media requests for comment.
