Cryptocurrencies fell heavily on Tuesday and the in-house token of major crypto exchange FTX slumped by almost a quarter as investors appeared to take fright at talk of pressure on FTX’s financials.
Bitcoin, the biggest digital token, fell as much as 6% to $19,351, its lowest in two weeks, and was on course for its worst day since mid-September. Ether, the next largest, fell over 6%.
FTX has come under pressure after Changpeng Zhao, head of rival exchange Binance – the world’s largest – said on Sunday his firm would liquidate its holdings of the FTX token due to unspecified “recent revelations”.
FTX founder Sam Bankman-Fried said the exchange was “fine” and that concerns were “false rumours”. FTX had no immediate comment when contacted by Reuters on Tuesday.
The FTX token – which gives holders discounts on FTX trading fees – was last down more than 30% at $15.41, its lowest since early 2021. The token, known as FTT, is the 30th largest digital coin with a value of $2 billion, according to CoinMarketCap.
Figures from analytics firm Nansen showed a one-day net outflow from FTX of about $630 million, suggesting account holders were also getting their money out.
“The question of solvency of FTX has been raised given recent events this year … however we don’t see any hard data as yet that would confirm this type of view.”
Crypto users raised questions on Twitter last week about FTX’s token following a report by news website CoinDesk on a leaked balance sheet from Alameda Research, a trading firm founded by Bankman-Fried that has close ties with FTX.
Alameda CEO Caroline Ellison said in a tweet on Sunday the “balance sheet info” showed only a subset of Alameda’s corporate entities. Alameda has over $10 billion in assets not reflected in the CoinDesk report, she said.
Reuters was unable to independently verify the accuracy of the report, or the origin of the leaked balance sheet.