Crypto exchange FTX is rapidly losing stablecoin liquidity after Changpeng Zhao, the chief executive officer (CEO) of the world’s biggest crypto exchange, Binance, announced that his firm will sell more than $500 million worth of FTX Tokens (FTT).
It was first revealed by Ki Young Ju, the founder of on-chain analytics firm CryptoQuant, on Twitter Monday. In his post, he noted that the stablecoin reserves of the FTX exchange reached a yearly low and has been down by almost 93% in the last two weeks alone.
Ju even included a chart in his tweet to support his claims, which made it even clearer that there has been a disastrous change in the stablecoin liquidity on the second-biggest crypto exchange in the world by spot volumes, as per CoinMarketCap.
Stablecoins are cryptocurrencies pegged to the $1 price level and are kept by users in their accounts to purchase more crypto coins. The fall in liquidity shows that the users are withdrawing their stablecoins or converting and then withdrawing them.
Afterward, the Ether (ETH) token withdrawals also achieved an all-time high at the crypto exchange, and it seems that users are losing trust in FTX.
Finally, FTT, the native token of FTX, witnessed a new milestone as Ju revealed that almost 60% of the circulating supply is in exchanges, likely ready to be traded or sold.
As per earlier reports, there have been rumors in the crypto market that the exchange led by Sam Bankman-Fried has been insolvent since the sale of FTT tokens that Binance received when it incubated FTX two years ago.
However, Bankman-Fried noted in a Tweet that his firm’s assets are fine, adding that the exchange has enough to cover all client holdings.
He also asked for cooperation from the CEO of Binance for the sake of the crypto ecosystem.