Binance exchange stops withdrawal of cryptocurrency because of FTX collapse
Binance exchange stops withd...
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Binance exchange stops withdrawal of cryptocurrency because of FTX collapse

13 December 2022
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2 min.
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Binance exchange stops withdrawal of cryptocurrency because of FTX collapse

FTX collapse

The world's largest cryptocurrency exchange, Binance, has suspended USDC digital currency withdrawals from customer accounts due to growing investor concerns amid the bankruptcy of the FTX exchange. This was reported by CNBC.

"We have recorded an increase in withdrawal requests in recent days," Binance founder Changpeng Zhao wrote on his Twitter page.

Investors began withdrawing funds, the channel specifies, including after the US Department of Justice began inspecting Binance exchange for compliance with US anti-money laundering laws.

The US Attorney for the Southern District of New York earlier said FTX founder and former CEO Sam Bankman-Fried was detained in the Bahamas at the request of the US government. Investors last month withdrew a record 91,000 bitcoins worth around $1.5bn from FTX, the largest outflow in its history.

The reason for FTX's failure

FTX issued millions of FTT tokens that once traded as high as $80 and transferred incoming money from investors to take out loans for its partner firm Alameda Research.

In November, when news spread that most of Alameda's balance sheet had been made out of FTT, markets went into disarray. FTT's price plummeted when Changpeng Zhao, founder of Binance, a competitor to FTX, withdrew his money.

After the sale deal with Binance fell through, Bankman-Fried resigned and the company filed for bankruptcy.

John J. Ray III, the chief executive who was brought in to oversee FTX's restructuring after Bankman-Fried resigned, said there was a "complete lack of reliable financial information". In prepared remarks, Ray said his initial investigation showed "gross mismanagement, excessive leverage" and "failures of internal controls".

In an interview with the New York Times in November, Bankman-Fried said he "deliberately did not mix means".

"Look, I was the CEO of FTX," Bankman-Fried said. "I say that over and over again. It means I had a responsibility. We got screwed up in a big way."

According to a statement from the Royal Bahamas Police Force. He is expected to appear in local court in The Bahamas on Tuesday.

Bahamas Attorney General Ryan Pinder said the country would "quickly" extradite Bankman-Fried to the United States after authorities made a formal request, the Associated Press reported.

Persons4 and Companies8 in the news

Member of the Bahamas Senate
1 place
Chief Executive Officer of FTX company
2 place
Founder of FTX
3 place
Founder and CEO of Binance
4 place
FTX company
2 place
CNBC
3 place
Binance
4 place
X (Twitter)
6 place
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Instagram
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14 Mention
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14 Mention
JP Morgan Chase
11 Mention
Amazon
10 Mention
Ford Motor Company
10 Mention
TikTok
8 Mention
White House
7 Mention

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