FTX Users Unite: Had All the Assets There, Oops”

FTX Users Unite: Had All the Assets There, Oops”

FTX was fine until it wasn't, and fears of its bankruptcy have sent shockwaves across crypto and hit users hard.

The crypto exchange paused withdrawals after seeing the value of the money around $6 billion left its platform in the last 72 hours.

The US-based platform FTX.US – a separate company that is not part of the tender offer – remains operational and facilitates withdrawals. But users of FTX's flagship exchange, headquartered in Antigua and Barbuda, are locked out of their funds.

Several have taken to Twitter to reveal that all of their wealth is tied up on the embattled platform.

FTX faced heat after Binance CEO Changpeng Zhao smelled a rat and said his exchange would liquidate its supply of FTT tokens, something he initially called for was not an attack on a direct rival.

Investor panic quickly grew around a Terra-style death spiral. At the time, the platform was processing around $2.6 billion in daily volume, but in the last 24 hours it has processed $4.3 billion per day Messari and ranks fourth behind its new potential owner Binance, Coinbase and Uniswap.

On Tuesday, the stock market tried to calm fears tweet his team was working to reduce a backlog of disbursements. “The queue is decreasing and returning to a more reasonable level,” it said. There has been no update since then.

FTX users are feeling more than just financial pain

Prominent crypto investor Cobie described the state of affairs as the worst “swap carpet” of all time. In the crypto world, a “rug” or “rug pull” refers to a crypto project that appears promising but leaves investors in the lurch by taking off with their funds.

It might be an exaggeration to consider the FTX situation an exit scam in the classic sense (it is more appropriate to say that it collapsed under a bank run). Still, it is clear that Cobie, like many others, did not expect FTX to abandon its users.

“Every exchange that was so robust in the past felt somehow unsafe to use pre-rug,” he tweeted. “I thought there was [probably] less than 1% chance of FTX going bankrupt.”

Bitcoin trader and self-proclaimed Solana maximalist Alex Wice said his entire assets are on FTX, while Another user claimed he had lost more than half of his own.

FTX founder Sam Bankman-Fried is one of them loudest Investors in Solana and its ecosystem after supporting several Projects built on the platform over the years.

Founding partner of Bitazu Capital Mohit Sorout stated that 95% of its funds were stuck on the trading platform. Former crypto investor Luke Belmar said he lost $120,000.

Others said they were hurt not only financially but also emotionally as they have spent a lot of time learning trading and using bots, the fruits of which are currently pending.

DeFi influencers @DegenSpartan said he managed to withdraw a significant amount but "foolishly" left some behind as he thought the situation wasn't that bad.

“[In my opinionBinancebacksoutFTXshutsdowngoesintobankruptcyandweseeafractionoffourmoneyinafewyears”hetweeted

Blockworks has not independently verified whether users' claims are true. But Twitter is littered with Reports out of user Disclosure large parts of their net worth are tied to FTX.

An FTX spokesperson did not respond to Blockworks' request for comment by press time.

Alexander Tkachenko, CEO of asset tokenization platform VNX, commented on the matter, noting that FTX is objectively known as one of the best exchanges in the space.

"FTX appears to have been the source of liquidity for the founders' various speculative trades that led to this situation. Selling FTX and fulfilling its obligations to users is the best option," Tkachenko told Blockworks.

It would be very damaging to the crypto industry if the Binance deal does not go through, resulting in users losing their assets, he added. “Zhao seems to understand this and is acting as a ‘lender of last resort’.”

Chris Bradbury, CEO of DeFi platform Oasis.app, said he would not describe FTX's near-collapse as a "rug pull" but rather that it was playing with fire and burning. The value of user deposits still on FTX is currently unclear.

“If the Binance deal goes through, it looks like it will protect users who have money on the platform and can get their money out, but it's still a big problem given what the deal looks like,” Bradbury said.

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The post FTX Users Band Together: 'Had Entire Net Worth On There, Oops' is not financial advice.