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.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

HYATT REGENCY SALT LAKE CITY

TUES, OCT. 8, 2024

Guided by the expertise of Blockworks Research Analysts team, this one day event will feature senior leaders, entrepreneurs, and developers from across the crypto industry. Attendees will have the opportunity to participate in an immersive experience to explore the latest trends, […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

hivemapper.jpeg

Research

We believe crypto market participants overlook Hivemapper’s fundamental potential due to a poor understanding of both the niche map data market and Hivemapper’s positioning relative to incumbents. Hivemapper’s token model catalyzes both a cost and product advantage via unmatched map freshness and near real-time accuracy, which is its wedge into a market characterized by stale data and high data collection costs. Its current and potential future product suite may represent one of the strongest possibilities for PMF in crypto today.

article-image

👨‍⚖️ SBF’s courtroom sequel: Plus, Coinbase’s legal loss was DeFi’s gain

article-image

Public mining companies have been acquiring sites, refreshing machine fleets and diversifying business models in preparation for the event

article-image

Exploit shows centralization can sometimes be an asset

article-image

The Fidelity Ethereum Fund, like other proposed ETH ETFs, seeks to stake a portion of its assets, according to the firm’s Wednesday registration statement

article-image

The DAO first voted on enabling SAFE transfers over a year ago