Cryptocurrencies slide due to concerns over FTX exchange markets

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SINGAPORE — Cryptocurrencies fell sharply on Tuesday and native crypto exchange FTX token tumbled 15% as investors appeared to be spooked talking about pressure on FTX’s finances.

Bitcoin, the largest cryptocurrency by market value, was down 4% to $19,750 and had its worst day in about two months. Ether, the second largest, fell 5%.

FTX came under pressure after the head of rival exchange Binance said on Sunday that his company would liquidate its holdings of FTX tokens due to unspecified “recent revelations”.

FTX founder Sam Bankman-Fried said the exchange was “good” and the concerns were “false rumours”. The company had no immediate comment when contacted by Reuters on Tuesday.

However, the FTX token was last down around 15% at $18.76 and figures from analytics firm Nansen showing a one-day net outflow from FTX of around $630 million suggested that account holders also received their money.

“With FTT headed south, below a major support level…(there are) massive FTX pullbacks, across multiple assets,” said Justin of Anethan Institutional, the company’s chief sales officer. Amber Group digital assets.

“It looks like investors are either selling assets or pulling them out – it’s likely going to be a tough week.”

Crypto enthusiasts had been asking questions on Twitter last week about the FTX token, following a report from news site CoinDesk about a leaked balance sheet of Alameda Research, a trading firm founded by Bankman- Fried who has close ties to FTX.

Reuters was unable to independently verify the accuracy of the report or the origin of the disclosed balance sheet, but it appears to have at least shaken fragile market confidence.

“On-chain analytics show that hundreds of millions of dollars have been withdrawn from FTX in the past day,” said Matthew Dibb, COO of Singapore-based crypto investment manager Stack Funds.

“The issue of FTX’s solvency has been raised given recent events this year…but we don’t yet see hard data that would confirm this kind of view.”

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