FTX NFTs Provided Loophole For Non-Bahamas Residents Wanting to Withdraw Funds

One NFT sold for $10 million on the FTX NFT marketplace, and the only logical conclusion is it was a way to retrieve frozen USD balances

article-image

SOURCE: SHUTTERSTOCK

share

FTX Group has filed for Chapter 11 bankruptcy in the US, and customers have been scrambling to get their money off the platform — by any means necessary.

The crypto exchange had re-enabled withdrawals on Thursday, but only in the Bahamas, the location of its headquarters and many employees. 

Some users without a Bahamian account themselves found a way to circumvent the system by using FTX’s NFT marketplace.

The marketplace tracked over $50 million in volume in the past 24 hours despite a Bahamas securities regulator freezing the assets of local subsidiary FTX Digital Markets (FDM).

Bahamian residents were buying NFTs on the FTX marketplace at inflated prices and withdrawing the cash for non-residents, UpOnlyTV host Cobie tweeted.

Loading Tweet..

A closer look at collections on the marketplace showed some extreme price jumps for some otherwise unremarkable NFTs. 

For instance, on Nov. 10, FTX Crypto Cup 2022 Key #25162 sold for $2.5 million when days earlier the NFTs in this collection were being traded for less than $1. Activity for the collection picked up only between Nov. 10 and Nov. 11 when it saw dozens of trades in the six and seven digit range. 

FTX Crypto Cup NFT sales
FTX Crypto Cup NFT sales

The Great Ape collection and its Ape Art NFTs saw its first jump from $1 to a $500 trade, while the most expensive Ape Art #312 went for a $10 million bid and trade on Friday.   

Ape Art NFT sales
Ape Art NFT sales

One user, AlgodTrading, was lambasted by crypto Twitter for offering a 100K fee to anyone that could help him “KYC on FTX.” However, he responded to the screenshot, claiming that he did not “buy any discounted claims/assets or accounts” and that “these rumors are false.”

The identities of those behind the Bahamian accounts helping non-residents is unknown, and the legalities around this are unclear.  

The FTX.com website states that “depositing and minting of NFTs is not supported on FTX International” and is directing users to its FTX US NFT marketplace.

While bids continue to be placed on FTX International’s NFT marketplace, the last trade occurred at 2:47 AM ET on Nov. 11 for a FTX Crypto Cup 2022 Key NFT for $500, indicating this exit ramp is no longer available.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates (6).png

Research

In recent months, a number of highly accretive developments were implemented across the protocol to improve fee capture, expand product functionality, and ultimately drive value accrual to the RUNE token, with more upgrades on the immediate horizon. These developments include hiking the minimum swap fee parameter to increase revenue, adding a Burn System Income Lever to reduce the RUNE supply, the addition of COSM-WASM smart contracting and IBC to enable an application layer, new chain integrations, and more.

article-image

A blockchain some thought dead in the water two years ago now feels cool

article-image

Former IRS agent and Binance executive Tigran Gambaryan will remain imprisoned in Nigeria’s Kuje prison

article-image

When Permissionless III wraps on Friday, there will be 26 days left until the 2024 presidential election

article-image

Plus, an update from the ground in Salt Lake City at Permissionless III

article-image

The US regulator accused the crypto market-making firm of acting as an unregistered dealer