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FTX US Temporarily Froze Crypto Withdrawals, Adding to Chaos of Bankruptcy Proceedings
The exchange filed for bankruptcy protection earlier Friday.
UPDATE (Nov. 11, 2022, 21:53 UTC): FTX US appeared to reverse its manual shutdown later Friday.
FTX US temporarily ceased processing withdrawals around midday Friday before inexplicably restarting hours later, adding to the confusion of a chaotic week that saw the ouster of exchange CEO Sam Bankman-Fried.
STORY CONTINUES BELOW
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The manual shutdown occurred shortly after midday New York time, according to a person familiar with the matter as well as on-chain data. But later Friday the exchange appeared to resume processing withdrawals.
FTX Group filed for bankruptcy protection in the U.S. earlier Friday, including FTX US – a day after FTX CEO Sam Bankman-Fried tweeted that FTX US had no financial exposure to FTX’s “liquidity” issues.
Read more: FTX Employees Worldwide Learned of Bankruptcy Along With the Public
FTX itself had halted withdrawals earlier this week, though customers in certain jurisdictions, such as Japan, the Bahamas and Turkey – were able to begin withdrawing some funds by Friday.
It’s unclear what will happen to these funds. While an initial bankruptcy filing suggested that unsecured creditors – meaning FTX’s customers – would be able to receive their assets, FTX is also reportedly facing a $10 billion hole (and indicated that its liabilities exceed that figure).
FTX US on Thursday warned users it might halt trading in the coming days, but said withdrawals would not be impacted.
“Withdrawals are and will remain open,” a notice on its website said. The notice was still on the website at press time.
Read more: Wintermute Ceased Trading and Moved Funds From Crypto Exchange FTX US Before Warning
Danny Nelson
Danny is CoinDesk's managing editor for Data & Tokens. He formerly ran investigations for the Tufts Daily. At CoinDesk, his beats include (but are not limited to): federal policy, regulation, securities law, exchanges, the Solana ecosystem, smart money doing dumb things, dumb money doing smart things and tungsten cubes. He owns BTC, ETH and SOL tokens, as well as the LinksDAO NFT.
Nikhilesh De
Nikhilesh De is CoinDesk's managing editor for global policy and regulation, covering regulators, lawmakers and institutions. When he's not reporting on digital assets and policy, he can be found admiring Amtrak or building LEGO trains. He owns < $50 in BTC and < $20 in ETH. He was named the Association of Cryptocurrency Journalists and Researchers' Journalist of the Year in 2020.
