FTX CEO Sam Bankman-Fried Speaks Out Amid Binance Drama – Denies Insolvency, Says Withdrawals Will Continue

FTX CEO Sam Bankman-Fried has denied insolvency rumors amid mounting speculations that his exchange is facing liquidity issues, worsened by Binance’s decision to dump all of its FTT holdings. 

In a series of tweets on Monday, Bankman-Fried referred to the speculation as FUD, claiming that a “competitor” is responsible for manipulating public opinion about the company.

https://www.twitter.com/SBF_FTX/status/1589598284322328579?s=20&t=emjbBJDuy3FY9KG8jNfcDw

Starting Monday, some FTX users shared that they are facing withdrawal delays. Bankman-Fried assured users that everything is running smoothly with the matching engine, although node throughput remains limited for Bitcoin withdrawals. FTX tweeted:

“BTC withdrawals: churning through them; node is throughput limited. We’re switching it to process from both ends, which should help speed it up,”

He also addressed stablecoin withdrawal issues, claiming that USD stablecoin redemptions are slower over the weekend because banks are closed. 

The concerns grew after it was revealed that the balance sheet of Alameda Research, which has close ties to FTX, was loaded with the exchange’s native exchange token FTT.

Subsequently, Binance CEO Changpeng Zhao announced that the exchange, which was also the owner of a sizable number of FTT tokens, has decided to liquidate any remaining FTT on its books. 

“We will try to do so in a way that minimizes market impact. Due to market conditions and limited liquidity, we expect this will take a few months to complete,” CZ said. Binance holds about 23 million FTX tokens worth about $529 million.

The news has negatively impacted the FTT token, which is down by more than 20% over the past 24 hours. The coin is currently trading at around $18, down by 80% from its all-time high of $84.18 recorded in early September 2021. 

Moreover, there has been a surge in capital flight from FTX amid mounting concerns about its liquidity situation. According to data shared by crypto analyst Dylan LeClair, over $450 million worth of funds has been withdrawn from the exchange over the past 24 hours. 

Quite the capital flight from FTX amidst Alameda worries. pic.twitter.com/kd8U6HDG0s

— Dylan LeClair 🟠 (@DylanLeClair_) November 7, 2022

Meanwhile, Binance co-founder and chief customer service officer Yi He has highlighted that the sell-off of FTT had nothing to do with the alleged “war” between the two exchanges. Rather, it is purely investment-related.

“Our decision to sell FTT is a pure investment-related exit decision, which has nothing to do with “a war” and we have no intention to engage in drama,” she said.