Hostaged FTX Funds Sold for Pennies on the Dollar in OTC Trades Among Customers

Troubled crypto exchange FTX halted withdrawals on Tuesday, leading panicked customers to offload their bags among themselves at steep discounts.

AccessTimeIconNov 9, 2022 at 7:57 p.m. UTC
Updated May 9, 2023 at 4:02 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Crypto traders with remaining funds on FTX are attempting to sell their account balances for fractions of their face value.

Telegram chats facilitating small over-the-counter (OTC) markets viewed by CoinDesk reveal buyers are bidding about 10 cents to 15 cents on the dollar for the locked-up funds, while sellers are generally looking to offload their balances at around 20 cents to 33 cents.

  • Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
    13:18
    Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
  • Why Core Scientific is Focused on 2028
    00:57
    Why Core Scientific is Focused on 2028
  • Bitcoin, Ether Rise Amid ETF Steam in Hong Kong; Solana's Latest Update
    02:14
    Bitcoin, Ether Rise Amid ETF Steam in Hong Kong; Solana's Latest Update
  • Bitcoin Whales Yet to Resume Accumulation: IntoTheBlock
    01:06
    Bitcoin Whales Yet to Resume Accumulation: IntoTheBlock
  • “Size for sale @ ... $0.20,” read a Wednesday morning Tweet thread. “$0.15 in mid-size snap filled."

    Another private Telegram messaged showed a seller asking to offload funds at “$100k block” minimums.

    The steep discounts at which the FTX deposits are trading highlight the lack of customer confidence over a rapid full recovery. The messages also provide an approximate estimate for the fair value of a dollar currently held in limbo at FTX.

    The international portion of the exchange, FTX.com, halted all crypto withdrawals on Tuesday after a run led to slow withdrawal processing times.

    Upon announcing the Binance bailout, FTX CEO Sam Bankman-Fried tweeted that “all assets will be covered 1:1” under the preliminary purchase agreement.

    However, CoinDesk reported earlier Wednesday that Binance was “strongly leaning toward scrapping" the FTX rescue after preliminary due diligence.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Tracy Wang

    Tracy was the deputy managing editor at CoinDesk. She owns BTC, ETH, MINA, ENS and some NFTs.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.