The bankruptcy of the FTX exchange has sent shockwaves through the cryptocurrency market as the exchange recently emptied its FTT treasury account to a new wallet address. Arkham Intelligence’s dashboard revealed that the transferred assets from the FTT Treasury wallet included 195.87 million FTT tokens valued at approximately $247 million, 1,938 ETH valued at around $6 million, and 6.36 million JOE tokens worth $3.25 million. This move has significantly reduced the balance of the Treasury wallet, which previously stood at about $612 million at the beginning of the year.
FTT Token’s Price Plummet
The FTT token, which was once considered the native token of the now-defunct FTX crypto exchange, has seen a drastic decline in value. Initially used to provide customers with discounts and privileges during the exchange’s prime, revelations during the trial of former FTX CEO Sam Bankman-Fried exposed the token’s involvement in manipulating financial records. As a result, the FTT token has plummeted by a staggering 98% from its peak of $84, with a recent decline of more than 34% over the past month and an additional 28% drop in the last seven days alone.
Regulatory Issues for FTX Exchange
Amid its bankruptcy proceedings, FTX Exchange continues to face regulatory hurdles. The Cyprus Securities and Exchange Commission (SEC) recently extended the suspension of its European subsidiary license until September 2024. This directive requires FTX Europe to adhere to the Investment Services and Activities and Regulated Markets Law. As a result, FTX Europe is currently prohibited from offering investment services, engaging in business transactions, or accepting new clients. The company is also forbidden from advertising investment services but must fulfill all pending transactions for itself and its clients upon request. Additionally, the SEC mandates the reimbursement of all funds and financial instruments from its clients.
The bankruptcy of the FTX exchange and the subsequent events surrounding the FTT token have had a significant impact on the cryptocurrency market. The decline in the FTT token’s value, coupled with regulatory issues faced by FTX Exchange, has raised concerns among investors and industry experts. It remains to be seen how the exchange will navigate these challenges and if it can regain trust within the crypto community.