FTX Crypto Price Up as Volume Pumps, But Dash 2 Trade is the 50x You've Been Waiting For

FTX CEO Sam Bankman-Fried reportedly requested emergency funding from investors during a conference call to close an $8 billion gap. On November 11, prominent cryptocurrencies were trading in the green early, as the global crypto market cap increased by more than 7.5% the day before to $869 billion.

However, over the last 24 hours, the total crypto market volume decreased by more than 23% to $144.29 billion. DeFi’s total volume was $6.88 billion, accounting for 4% of the crypto market’s total 24-hour volume. The entire volume of all stablecoins was $140.42 billion, accounting for 97% of the crypto market’s total 24-hour volume.

FTX Experienced Massive Withdrawals

CZ, the founder of Binance, revealed that the exchange would start selling off its remaining FTT tokens, the native currency of FTX. Since this announcement, FTX has seen a 94% drop in its total revenue, which amounts to about $14.6 billion. Additionally, CZ’s remarks led to significant withdrawals from the FTX exchange and a liquidity crisis.

According to a message sent to employees by Sam Bankman-Fried (SBF), CEO of FTX, the crypto exchange FTX saw withdrawals totaling nearly $6 billion in the 72 hours preceding November 08 morning.

Withdrawals from the exchange were opposed by FTX, which even blocked transactions at one point. The FTX website displayed a new banner on November 9 informing traders that it is no longer accepting withdrawals and strongly advising them not to deposit. FTX is looking for rescue funding in the form of a combination of debt and equity to avoid liquidation.

SBF Says FTX Must Raise $8 Billion

According to a Wall Street Journal (WSJ) report citing “people familiar with the matter,” SBF reportedly requested investors in a call on November 09 when he discussed methods to solve FTX’s financial problems. The investor call came at the same time that rival cryptocurrency exchange Binance announced it was canceling its planned acquisition of FTX.

According to reports, Sam Bankman-Fried has asked investors for $8 billion in emergency funding to cover a shortfall caused by an increase in withdrawal requests for his cryptocurrency exchange in recent days. SBF is looking to raise $3 billion to $4 billion in equity, with the possibility of a debt swap to bridge the gap. Furthermore, SBF stated that he intended to use his funds to compensate customers and investors.

The CEO blamed a portion of the company’s problems on the exchange’s campaign, which resulted in a surge of investors trying to cash out for fear of losing their investment. SBF asserted that FTX was unable to pay withdrawals because its collateral was depreciating and could not be liquidated. As a result, SBF informed FTX investors that the company would have to file for bankruptcy if additional funding was not obtained.

Why are Cryptocurrency Prices Falling?

Binance signed a non-binding agreement of intent to purchase FTX on November 8. However, it backed out of the agreement due to issues beyond its control or ability to assist. Cryptocurrency prices fell after it was suggested that the proposed acquisition of Binance was a bailout. Coindesk reported on Friday, citing unnamed sources, that the US Department of Justice (DoJ) has requested evidence from the cryptocurrency exchange Binance regarding its failed bailout negotiations with the financially troubled FTX exchange.

As the cryptocurrency exchange FTX tries to fix a multi-billion dollar hole in its finances, it has lost another potential savior. As of November 10, Tether’s CTO Paolo Ardoino was quoted as saying categorically that the stablecoin issuer has “no plans to invest or lend money to FTX/Alameda.” Furthermore, the recent events involving the CEOs of Binance and FTX are causing volatility and extreme bearish sentiment in cryptocurrency prices.

FTX Sets up a Credit Facility with Tron

FTX announced Thursday that it will launch a Tron credit facility, enabling users to withdraw TRX, BTT, JST, SUN, and HT. This turns out to be the case since on Wednesday night, Justin Sun, the network’s creator and the creator of the cryptocurrency Tron, publicly intervened in the drama.

Sun’s strategy “for now, the objective is to protect all the TRON ecosystem token holders and facilitate a venue to continue withdrawals,” sources told Yahoo Finance. Hence, the crypto market is gaining support and signaling a slight recovery in response to positive news from FTX.

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