Financially downtrodden cryptocurrency exchange FTX has restored the functionality of its website after a period of sporadic downtime. Upon restoration, the trading platform has displayed a banner announcing that withdrawals are currently halted while discouraging users from depositing.
FTX’s Notification on Withdrawals and Deposits
The FTX website came back online at around 9:00 pm UTC on Wednesday, November 9, following an encounter with five instances of network downtime that went on for hours, according to the “IS IT DOWN OR JUST ME” website.
The new bright red banner on FTX’s website has not gone unnoticed, with several accounts across the crypto community commenting on it. The banner reads:
“FTX is currently unable to process withdrawals. We strongly advise against depositing.”
On November 8, another pinned message on the official FTX Telegram Group confirmed the pausing of withdrawals, absent any speculations on when normalcy would resume. A member of FTX support staff wrote:
“We are waiting for confirmation from our team to ramp it up. We don’t have an ETA but will surely communicate it as soon as we have it.”
There have been reports of new users who tried registering for a new account on the website but have yet to be successful. According to the complaints, this followed their encounter with alerts that “signups are paused” currently. It, therefore, means that while deposits are strongly advised, they are only available to existing account owners, not new ones on the FTX trading platform.
Etherscan Records Withdrawal Activity
According to data from Etherscan, however, FTX seems to have resumed withdrawals, as transactions appear to be leaving the FTX hot wallet, though sluggishly, at a rate in the single digits per minute. Blockchain data indicates that different types of tokens and large sums of transactions have since moved from the hot wallet, recording a balance of $469 million as of several hours ago.
Nonetheless, there have also been other users who have complained of pending withdrawal requests for days and are still awaiting processing. Funds are moving away from the FTX hot wallet at two or three transactions every minute.
According to Google Trends, search results for the “FTX website” also displayed a massive spike over the few hours after the reports that the website had been taken down sporadically.
There still needed efforts from FTX to clarify why the website had been taken down.
Two other websites related to the crypto exchange- Alameda Research and FTX Ventures- remain down at press time. The downtime comes amid the ongoing liquidity crunch facing the FTX exchange.
“This afternoon, FTX asked for our help. There is a significant liquidity crunch.”
The two websites are offline and made private, while both FTX’s leading and FTX US websites remain accessible. The latest development includes uncorroborated reports that most of FTX’s legal and compliance staff quit as of November 8.
In a November 9 report, Wall Street Journal claimed that the FTX exchange is facing a shortfall of $8 billion, which renders it incapacitated to meet withdrawal demands unless it secures emergency funding. At first, Binance signed a non-binding letter expressing an intention to bail out the embattled exchange by acquisition.
“To protect users, we signed a non-binding LOI, intending to acquire http://FTX.com and help cover the liquidity crunch fully. We will be conducting a full D.D. in the coming days.”
Barely a day after this commitment, the giant crypto exchange pulled out from the deal because of mishandled customer funds and the need to stay out of the U.S. regulator’s line of fire, leaving FTX on the brink of a collapse.
While FTX has not made any official announcement, Twitter users have posted several unconfirmed reports corroborating withdrawal activity. This, along with blockchain data, confirms that funds are leaving the exchange’s hot wallet.