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The US arm of troubled company FTX is closing trading activities soon but still permits customers to make withdrawals.
FTX US recently announced it will suspend trading activities in a few days. However, the US arm of the popular Bahamian-based crypto exchange specified that withdrawals remain open. As FTX US put it, “Withdrawals are and will remain open. We will give updates as we have them”. As of press time, there was no official statement from the company.
FTX US is a small arm of FTX and describes itself as a US-regulated crypto exchange. Although its parent company is headquartered in the Bahamas, the US business management team partially operates autonomously. Brett Harrison previously served as president of FTX US until September, when he resigned amid the company’s substantial operational expansion.
At the time, although Harrison appeared to be moving on from FTX, he also suggested that he would ease the exchange through his absence. As Harrison put it:
“I can’t wait to share more about what I’m doing next. Until then, I’ll be assisting Sam and the team with this transition to ensure FTX ends the year with all its characteristic momentum.”
FTX US Trading Development Part of Parent Company’s Financial Crisis
The notice by FTX US on trading activities comes amid its parent company’s implosion and liquidity crisis. FTX is currently sinking toward bankruptcy and is seeking a massive bailout following mass customer fund withdrawals. According to the crypto exchange’s embattled CEO, Sam Bankman-Fried, FTX needs at least $8 billion to pull itself out of its financial rubble. At some point, it seemed like rival exchange Binance was going to throw it a lifeline, but that notion has dissipated. After deliberating on the deal, Binance announced that it would no longer go ahead, further pushing FTX into financial turmoil.
Yesterday, Bankman-Fried accepted responsibility for his company’s current state, admitting that he should have been more open about the current state of affairs. The FTX chief executive said:
“I also should have been communicating more very recently. Transparently–my hands were tied during the duration of the possible Binance deal; I wasn’t particularly allowed to say much publicly. But of course it’s on me that we ended up there in the first place.”
Taking cues from his self-professed culpability, Bankman-Fried proceeded to provide the latest on the FTX insolvency situation. According to him, minus its US arm, the company’s international operation market value of assets and collateral currently exceeds client deposits. However, the FTX CEO also explained that it differs from liquidity for delivery and referenced the current withdrawal state to underscore his point. Bankman-Fried also suggested that the development surrounding FTX’s affairs is still far from over. He says he is still fleshing out details of the full story as it develops.
Bankman-Fried also revealed that FTX is doing all it can to raise liquidity. In addition, the company’s CEO said he is talking with relevant players regarding the next step for the exchange.