Bankrupt crypto exchange FTX transferred nearly $400M worth of newly created FTT tokens to a yet-to-be-identified wallet Saturday night, sending the price of the token crashing to new lows.
195M FTT tokens were transferred just after 9 p.m. ET. Only 133M FTT tokens were circulating at the time, according to data from Etherscan, making this address the largest FTT holder by far.
FTT dropped 13% to $1.89. Just a week earlier, it was trading at more than $23.
The tokens were moved to a wallet whose owner is yet to be identified by Etherscan or Nansen.
Bahamian Regulator Denies Order
In a separate development, Bahamian authorities said they have not ordered FTX to expedite withdrawals from Bahamian customers, contradicting the bankrupt exchange’s stated reason for resuming withdrawals on Thursday morning.
Since then, more than $50M in crypto has been withdrawn from FTX, according to data from Nansen.
The pair of developments Saturday are likely to fuel speculation of wrongdoing from within FTX.
When the exchange resumed withdrawals Thursday, observers of on-chain data noted that most requests were unsuccessful, prompting speculation that those who were able to withdraw were employees, their friends or their family.
FTX insisted, however, that it was allowing the withdrawal of Bahamian funds “per our Bahamian HQ’s regulation and regulators.”
On Saturday night, the Securities Commission of the Bahamas denied it had ever given such an order.
“The commission wishes to advise that it has not directed, authorized or suggested to FTX Digital Markets Ltd. the prioritization of withdrawals for Bahamina clients,” the regulator said in its statement. “The Commission furthers notes that such transactions might be characterized as voidable preferences under the insolvency regime and consequently result in clawing back funds from Bahamian customers.”
FTX’s swift downfall was precipitated by FTT. A CoinDesk article published on Nov. 2 revealed FTX sister company Alameda Research held almost half its balance sheet in FTT, in an amount it could not reasonably sell without destroying the token’s value.
Changpeng Zhao, the CEO of Binance, the world’s largest crypto exchange, said on Nov. 7 that the company would exit its $500M FTT stake to mitigate risk, prompting a run on FTX’s deposits. Unable to honor withdrawals, FTX filed for bankruptcy on Friday morning.