Weekly stablecoin outflows from FTX rise as Binance exerts pressure
According to statistics from Nansen, more than $451 million worth of stablecoins has left the FTX cryptocurrency market in the last week.
FTX has seen a rise in stablecoin withdrawals over irrational concerns about the cryptocurrency exchange’s finances.
According to statistics from Nansen, over $451 million worth of stablecoins has left the exchange in the last week due to a rush of significant withdrawals by consumers. Nansen monitors wallets that it thinks to belong to FTX based on data from the blockchain.
FTX is under pressure when a piece of its sibling trading business Alameda Research’s financial sheet was disclosed. Changpeng Zhao, the chief executive officer of rival exchange Binance, raised the stakes over the weekend by announcing that his company intended to dump a big quantity of FTX’s stablecoin.
The Block’s vice president of research, Larry Cermak, tweeted today about why traders have been removing their assets off the exchange: “In crypto, when sh*t gets stress-tested, it’s always better to be safe than sorry, even if the possibility is incredibly tiny.” He stated in a subsequent tweet that “the likelihood of FTX insolvency is close to zero percent.”
As of June 2022, Alameda’s financial sheet revealed that the corporation has $14.6 billion in assets and $8 billion in liabilities, including $7.4 billion in loans, as originally reported by CoinDesk.
Alameda reported $3.66 billion in “unlocked FTT,” the native token of crypto exchange FTX, and $2.16 billion as “FTT collateral” among its assets. The expected bankruptcy claims arose from the fact that a substantial percentage of Alameda’s asset holdings were in FTT, a token established by the company, as opposed to more conventional assets such as fiat currencies.
Caroline Ellison, the chief executive officer of Alameda, confirmed subsequently that the leaked balance sheet reflected a portion of the company’s holdings and that the company had an extra $10 billion in assets. Nonetheless, it was insufficient to calm worries and avert a market reaction. As balance sheet facts began to circulate, investor money began to withdraw from the exchange, on-chain data indicates.