In brief
- FTX US alerted users Thursday to a potential halt to trading functionality “in a few days.”
- FTX is embroiled in a liquidity crunch and attempting to raise money to keep the company out of bankruptcy.
Amid cryptocurrency exchange FTX’s liquidity crunch and apparent unraveling this week, founder and CEO Sam Bankman-Fried has continued to insist that FTX US is a separate company from its global business and operating just fine. However, FTX US is now warning users that their access to the platform could end soon.
In a message first pinned to the top of the FTX US trading page early this afternoon, the firm alerted users, “Trading may be halted on FTX US in a few days. Please close down any positions you want to close down. Withdrawals are and will remain open. We will give updates as we have them.”
Decrypt reached out to FTX representatives to clarify whether withdrawals will still be available to users after a potential trading halt is enacted but did not immediately hear back. The official FTX Twitter account shared in a tweet reply that withdrawals are currently processing as normal.
if it's useful to anyone here is a screenshot from one of the https://t.co/tUryXIXJ04 admin pages, US withdrawals still being processed as normal and https://t.co/tUryXIXJ04 still operational pic.twitter.com/9YGs4b4uAu
— FTX (@FTX_Official) November 10, 2022
Early Thursday, Bankman-Fried tweeted about his plans to rescue FTX amid its crisis this week, and reiterated that FTX US is separate from FTX proper—and that it’s business as usual there.
“FTX US, the US-based exchange that accepts Americans, was not financially impacted by this shitshow,” he wrote. “It's 100% liquid. Every user could fully withdraw.”
Although FTX US has been referred to as a separate company from the international FTX.com business, the companies are significantly intertwined. The core FTX branding has been used widely in the United States as part of sponsorship deals, for example, and some of those deals have specifically been reached with both FTX and FTX US.
On Wednesday, Bloomberg reported that the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are investigating FTX and how it managed customers' money, as well as how closely FTX and FTX US were connected.
What's more, ahead of Bankman-Fried’s public tweets, purported leaked Slack messages from the CEO surfaced in which he suggested a potential fundraise that would inject funds into both FTX and FTX US at the same time.
Earlier today, FTX US Derivatives CEO Zach Dexter told customers in a letter that funds within its licensed derivatives exchange business were totally safe, and that it would “soon be entirely separate” from the “FTX family of companies.”
FTX’s future is currently unclear, however. On Tuesday, rival exchange Binance said that it had signed a non-binding letter of intent to acquire FTX, but it reversed course on Wednesday citing the extent of FTX’s liquidity crisis. Bankman-Fried is now attempting to raise funds to salvage the company, avoid bankruptcy, and return funds to customers.