On April 18, the troubled FTX exchange made a bold move by emptying its FTT treasury account to a new wallet address. 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 drastic action resulted in the Treasury wallet holding only about $205 worth of digital assets, a stark contrast from its balance earlier in the year.
FTT, the native token of the now-defunct FTX crypto exchange, was once a coveted asset that provided customers with discounts and privileges. However, revelations during the trial of former FTX CEO Sam Bankman-Fried exposed how the digital asset was utilized to manipulate the financial records of the exchange and its affiliated trading firm, Alameda Research. This manipulation, along with the exchange’s collapse, caused FTT to plummet by a staggering 98% from its peak of $84. In the past month alone, FTT has experienced a decline of over 34%, with a further drop of approximately 28% in the last seven days.
As if the bankruptcy and token manipulation weren’t enough, FTX exchange is also grappling with regulatory issues. The Cyprus Securities and Exchange Commission (SEC) extended the suspension of its European subsidiary license until September 2024. This directive prohibits FTX Europe from offering investment services, engaging in business transactions, or accepting new clients. Additionally, the firm is barred from advertising investment services but must fulfill all pending transactions for itself and its clients upon request. The SEC also mandates the reimbursement of all funds and financial instruments from its clients, adding to the company’s list of challenges.
The downfall of FTX exchange serves as a cautionary tale of mismanagement, regulatory violations, and financial instability. The once-promising exchange now faces a bleak future as it navigates through bankruptcy proceedings, plummeting token prices, and stringent regulatory actions. Only time will tell if FTX can weather this storm and emerge stronger or if it will succumb to the weight of its past misdeeds.