FTX Users Band Together: ‘Had Entire Net Worth On There, Oops’

FTX suspended withdrawals in the midst of a bank run, leaving countless crypto traders anxious about their funds

article-image

FTX’s Sam Bankman-Fried | Blockworks exclusive art by axel rangel

share

FTX was fine until it wasn’t, and fears around its insolvency have sent shockwaves across crypto, hitting users hard.

The crypto exchange paused withdrawals after seeing funds worth around $6 billion leave its platform in the last 72 hours.

US-based platform FTX.US — a separate firm not part of the acquisition offer — remains operational and facilitating withdrawals. But users of FTX’s flagship exchange headquartered in Antigua and Barbuda are locked out of their funds.

Several have taken to Twitter to disclose their entire net worth is tied up on the embattled platform.

FTX began facing heat after Binance CEO Changpeng Zhao smelt a rat and said his exchange would liquidate its stash of FTT tokens, in what he initially urged was not an attack on a direct rival.

Investor panic quickly grew around a Terra-style death spiral. At the time, the platform was processing around $2.6 billion in daily volume but has handled $4.3 billion in the past 24 hours, per Messari, ranking it fourth behind its new prospective owner Binance, Coinbase and Uniswap.

On Tuesday, the exchange attempted to calm fears by tweeting its team was working to reduce a withdrawal backlog. “Queue is decreasing and getting back to more reasonable levels,” it said. There’s been no update since.

FTX users feeling more than financial pain

Prominent crypto investor Cobie described the state of affairs as the worst-ever “exchange rug.” In the crypto world, a “rug” or “rug pull” refers to a crypto project that seems promising but deserts investors by taking off with their funds.

It might be a stretch to consider the FTX situation an exit scam in the classical sense (it’s more appropriate to say it buckled under a bank run). Still, it’s clear that Cobie, like many, didn’t expect FTX to fail its users.

“Every exchange that rugged in the past felt kinda unsafe to use pre-rug,” he tweeted. “I thought there was [probably] sub-1% chance of FTX insolvency.”

Loading Tweet..

Bitcoin trader and self-described Solana maximalist Alex Wice said his entire net worth is on FTX, while another user claimed he lost more than half his own.

FTX founder Sam Bankman-Fried is one of the loudest investors in Solana and its ecosystem, having backed multiple projects built on the platform throughout the years.

Bitazu Capital founding partner Mohit Sorout indicated 95% of his funds were stuck on the trading platform. Early crypto investor Luke Belmar said he lost $120,000.

Others said they were not just hurt financially, but also emotionally since they spent a considerable amount of time learning how to trade and utilizing bots, the fruits of which are currently in limbo.

Loading Tweet..

DeFi influencer @DegenSpartan said he managed to withdraw a significant amount, but “foolishly” left some as he thought the situation wasn’t too bad.

“[In my opinion,] Binance backs out, FTX shuts down, goes into bankruptcy and we see a fraction of our money in a few years,” he tweeted.

Blockworks hasn’t independently verified whether the users’ claims are true. But Twitter is littered with reports from users disclosing large chunks of their net worths stuck on FTX.

Loading Tweet..

A spokesperson for FTX didn’t return Blockworks’ request for comment by press time.

Alexander Tkachenko, CEO of asset tokenisation platform VNX, weighed in on the matter, noting that FTX was objectively known as one of the best exchanges in the space.

“FTX appears to have been the source of liquidity for the various speculative transactions of the founders, which led to this situation. The sale of FTX and fulfilling its obligations to the users is the best option,” Tkachenko told Blockworks.

Loading Tweet..

It would be very damaging to the crypto industry if the Binance deal doesn’t go through, leading to users losing their assets, he added. “Zhao appears to understand this and is acting as the ‘lender of last resort.'”

Chris Bradbury, CEO of DeFi platform Oasis.app, said he wouldn’t describe FTX’s near-collapse as a “rug pull,” but that it did play with fire and get burnt. The value of user deposits still on FTX is currently unclear.

“If the Binance deal goes through, it looks like that will protect users who have funds on the platform and will be able to get their money out, however it’s still a big if regarding the deal going through by the looks of things,” Bradbury said.


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

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

article-image

Customers can pay merchants in USDC or USDP on Ethereum, Solana, and Polygon, while US-based merchants are paid in dollars