By Tom Westbrook, Tom Wilson and Hannah Lang
LONDON/SINGAPORE (Reuters) -Cryptocurrencies fell heavily on Tuesday and the in-house token of major crypto exchange FTX slumped by almost a quarter as investors appeared to take fright at talk of pressure on FTX’s financials.
Bitcoin, the biggest digital token, fell as much as 6% to $19,351, its lowest in two weeks, and was on course for its worst day since mid-September. Ether, the next largest, fell over 6%.
FTX has come under pressure after Changpeng Zhao, head of rival exchange Binance – the world’s largest – said on Sunday his firm would liquidate its holdings of the FTX token due to unspecified “recent revelations”.
FTX founder Sam Bankman-Fried said the exchange was “fine” and that concerns were “false rumours”. FTX had no immediate comment when contacted by Reuters on Tuesday.
The FTX token – which gives holders discounts on FTX trading fees – was last down more than 30% at $15.41, its lowest since early 2021. The token, known as FTT, is the 30th largest digital coin with a value of $2 billion, according to CoinMarketCap.
Figures from analytics firm Nansen showed a one-day net outflow from FTX of about $630 million, suggesting account holders were also getting their money out.
“On-chain analytics show hundreds of millions being withdrawn from FTX over the last day,” said Matthew Dibb, chief operating officer of Singapore-based crypto investment manager Stack Funds.
“The question of solvency of FTX has been raised given recent events this year … however we don’t see any hard data as yet that would confirm this type of view.”
Crypto users raised questions on Twitter last week about FTX’s token following a report by news website CoinDesk on a leaked balance sheet from Alameda Research, a trading firm founded by Bankman-Fried that has close ties with FTX.
Alameda CEO Caroline Ellison said in a tweet on Sunday the “balance sheet info” showed only a subset of Alameda’s corporate entities. Alameda has over $10 billion in assets not reflected in the CoinDesk report, she said.
Reuters was unable to independently verify the accuracy of the report, or the origin of the leaked balance sheet.
(Reporting by Tom Westbrook and Tom Wilson in London and Hannah Lang in Washington; Editing by Louise Heavens and Ed Osmond)
