The chaos that ensued following the FTX scandal the past week has caused much uncertainty in the market. Investors have lost confidence in institutions and exchanges holding their funds and have responded by withdrawing over $3 billion in Bitcoin from exchanges.
According to data by Coinglass and reports by Cointelegraph, an estimated 190,000 Bitcoin have been withdrawn from exchanges in the seven days since the news of FTX’s liquidity crisis broke. The 190,000 BTC is worth approximately $3 billion at Bitcoin’s current price. As the FTX crisis began to unfold, concerns started to grow among investors over the security of their funds on exchanges. Commentators from all walks of life advised users to avoid custodial wallets and to take control of their crypto assets. Regulators have since also upped their scrutiny of the crypto industry across the board. On-chain data reveals that investors withdrew BTC at a much higher rate over the past seven days, something not witnessed since April 2021 with most opting for non-custodial wallets. As of November 12, withdrawing addresses totaled over 70,000.
Senior analyst at Glassnode, Checkmate, said:
Exchange balances are best estimated based on wallet clustering. They are more likely to be a lower bound than an overestimate.
He added that three exchanges in particular with what he called “particularly weird” Bitcoin balance readouts – Huobi, Gate.io, and Crypto.com, adding:
These fund flows between exchanges include both real customers + FTX/Alameda. Hard to separate, thus looking as relative-to-balance.
Binance CEO, Changpeng “CZ” Zhao, who was set to acquire FTX but decided against it following an investigation of its finances, has warned that the FTX fallout could be about to hit another crypto exchange, warning of “clear sign[s] of problems.” CZ’s comments come after Crypto.com accidentally transferred more than 300,000 Ethereum, worth about $360 million, off its exchange saying “If an exchange [has] to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems.” He concluded by saying “Stay away.”
If an exchange have to move large amounts of crypto before or after they demonstrate their wallet addresses, it is a clear sign of problems. Stay away. Stay #SAFU. 🙏
— CZ 🔶 Binance (@cz_binance) November 13, 2022
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
