Nov 8, 2022 - Technology

FTX’s U.S. subsidiary says it’s not impacted by liquidity crunch

Illustration of a hundred dollar bill in the shape of the FTX logo

Illustration: Sarah Grillo/Axios

The US-based subsidiary of embattled crypto exchange FTX.com tells Axios it “continues to operate normally.”

Why it matters: Its parent company’s announcement Tuesday morning that it agreed to sell to to rival Binance amid a liquidity crunch raised questions about the fate of U.S. customers.

What they're saying: "FTX US is a separate entity with separate management personnel, tech infrastructure, and licensing," an FTX US spokesperson tells Axios.

  • "On FTX US withdrawals are and have been live, assets are fully backed 1:1, and the exchange continues to operate normally."

Context: FTX faced over $6 billion in customer withdrawals over the previous 72 hours, according to an internal memo obtained by Reuters, and its main unit paused further withdrawals.

What's next: U.S. regulators and lawmakers are already monitoring the situation.

  • The Commodity Futures Trading Commission (CFTC) told the press it’s keeping an eye, but that "any regulatory issues right now are unclear."
  • House representative Patrick McHenry, a top ranking Republican on the Financial Services Committee, said “The recent events show the necessity of Congressional action.… I look forward to learning more from FTX and Binance in the coming days about these events and the steps they will take to protect customers during the transition.”
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