Turns out running a cryptocurrency trading firm (Alameda Research) and an exchange which trades cryptocurrency is a small conflict of interest. There has been speculation in the past Sam Bankman-Fried would tip off Alameda Research into profitable trades, which had negative consequences for the FTX userbase. This is a very serious allegation since even in the crypto market’s infancy of regulation there exists provisions for this. Alameda’s dubious positions aside covered in the recent Coindesk article about a leaked document, there is more going on at FTX.
Users are concerned about their funds and rightly so, as @Lookonchain reports the exchange’s hot wallets have decreased in excess of $600,000,000 with no stable coins or Ethereum ($ETH). Of the remaining $1,800,000,000 in assets there is nearly $1,000,000,000 of $FTT (a native token of FTX) which is also heavy on Alameda’s balance sheet. Some users have criticized the liquidity of FTT and called into question how there are less than a couple thousand people transacting FTT.
Apparently $FTT isn’t seen in a good light by a competitor at Binance, who liquidated their stake of $FTT citing risk management.
Alameda, in a now deleted tweet, has set the floor price of $FTT at $22
Some are also concerned about the terms of service being violated but there is no evidence of this on-chain to my knowledge.
However if you do have funds here the terms of service make no concessions to deposit protection or insurance of funds and you should think about the possible consequences of inaction.
For investors who have already ran for the exits some are reporting withdrawal times of up to 3 hours, which the Terms of Service also do not guarantee.
If you are hearing it here first and you have funds on FTX, be smart and do what you think is necessary.