FTX Drama Triggers Billions of Dollars Worth of Exchange Outflows

The spectacular collapse of 30-year-old Sam Bankman-Fried’s crypto empire has fueled a spike in outflows across global crypto exchanges. Users yanked a net billions from these platforms as trust erodes. Before FTX collapsed, millions of customers used it to trade and store billions of dollars worth of crypto. Many of them were drawn to the platform by its CEO, Sam.

FTX filed for bankruptcy on Friday, one of the highest profile crypto blowups, after traders rushed to withdraw $6 billion from the platform in just 72 hours and rival exchange backed away from a rescue deal. The widespread crypto withdrawals are taking place after insolvency issues forced embattled crypto exchange FTX into signing a letter of intent with Binance, which would see the latter potentially acquire the company, a deal which ultimately fell through.

Net exchange outflows have soared in the wake of FTX’s bankruptcy, inciting crypto holders everywhere to look after their own digital assets. Data from on-chain analytics firms confirms a dramatic increase in withdrawals as users move their cryptocurrency to personal wallets, seeking greater security and control in the aftermath of the FTX turmoil. The FTX drama serves as a stark reminder of the risks associated with centralized crypto exchanges and the importance of self-custody.