After Binance CEO Changpeng Zhao (CZ) announced his company’s full exit from its FTT position on Sunday, cryptocurrency exchange FTX is rapidly losing stablecoin liquidity.
Additionally reaching a record high, ETH withdrawals from FTX may be an indication that depositors are concerned about the security of their money.
FTX currently has $104.9 million worth of stablecoins in its on-chain reserves, according to a tweet thread from CryptoQuant CEO Ki Young Ju. He reported a figure of just $51 million yesterday, a yearly low and a 93% drop in just two weeks.
FTX’s stablecoin reserves, according to supporting data from Nansen that Ju provided on Monday, were only at $93 million. Additionally, it revealed that over $450 million in net outflows were processed by the exchange in the previous 24 hours and close to $700 million in the previous 48 hours.
While FTX was losing depositors, Binance appeared to increase exchange inflows by about $411 million during the same time frame.
“FTT token reserves across all exchanges reached an all-time high,” added Ju. “60% of the circulating supply is in exchanges.”
FTT is FTX’s native crypto token, which offers a variety of benefits to exchange holders. Over the weekend, the token fell 10% after CZ confirmed that Binance would fully exit its FTT position, which was worth $584 million in total.
In response to “recent revelations that have come to light,” CZ stated that selling off FTT was a form of “post-exit risk management.” He went on to say that his company would not “back people who lobby against other industry players behind their backs.”
The company intends to gradually offload that position over the next few months to minimize the market impact.
CZ’s comments, as well as the subsequent FTX withdrawal wave, have sparked panic on crypto Twitter, with many influential voices advising FTX users to withdraw their funds.
FTX CEO Sam Bankman-Fried (SBF) has denied that the exchange is in financial trouble and that it is fully capable of processing withdrawals.
Alameda, another company owned by SBF, is also having its financials scrutinized due to its apparent high exposure to FTT. The CEO has offered to buy as much FTT from Binance as the company is willing to sell.
In addition, the company appears to be transferring stablecoins to FTX’s hot wallet.
