Sam Bankman-Fried, CEO of crypto exchange FTX, at the Bitcoin 2021 conference in Miami, Florida, on June 5, 2021.
Eva Marie Uzcategui | Bloomberg | beautiful pictures
Some FTX users seem to have found a way to move funds out of the exchange through a back door in the Bahamas.
Analysis by data firm Argus found unusual trading patterns over the past five days as FTX controlled customer withdrawals. Most anomalies associated with digital collectibles, called NFT. According to Argus, the samples show “desperate” customers turning to FTX users in the Bahamas for help.
The now bankrupt global crypto exchange only allows withdrawals in the Bahamas after halting FTX liquidations everywhere else in the world. The company, once $32 billion, was partly based in Nassau, said in a statement tweet said it must facilitate Bahamian withdrawals to comply with local regulations.
High-net-worth users are paying sky-high prices for NFT on FTX at a time when the broader crypto and digital collectibles market has gone down. In one case, a collection that traded for nearly $9 three weeks ago sold for $10 million on Friday. Another similarly priced NFT a month ago, sold for $888,888.88 this week.
Owen Rapaport, Co-Founder and CEO of Argus, a blockchain analytics firm specializing in insider trading.
Argus said this type of transaction could be an attempt by FTX users to access funds in any way they can. According to Rapaport, one possibility is that traders have an agreement with Bahamian users to pay some percentage of assets and in return receive them after they successfully withdraw from FTX.
Elsewhere, trading volumes for immutable tokens are down 97% from their record highs, according to data from Dune Analytics. Price of bitcoin has dropped 75% from its all-time high a year ago.
These transactions are visible on the blockchain, which acts as a public ledger to track the movement of money. Although anyone can see where the money moves, identities remain anonymous. Argus cannot say for certain who these customers are, and FTX appears to have closed unusual trading on Friday. There are still “bids” or offers for expensive collectibles today, but no buy orders have been executed since.
FTX and founder Sam Bankman-Fried did not immediately respond to CNBC’s request for comment.
Several Twitter users pointed out similar anomalies this week. A popular crypto podcast host, named Cobie, was one of the first to recommend users to buy NFTs for sale by Bahamian users. He pointed to a wallet that withdrew $21 million worth of Tether crypto from FTX and sent it to an address that appeared to be based in the Bahamas.
FTX is said to have seen mysterious outflows after filing for bankruptcy protection. Reuters report early Saturday that between $1 billion and $2 billion in customer funds had “disappeared” from the exchange, citing two people familiar with the matter. Meanwhile, data firm Elliptic estimate $473 million was moved out of FTX in a suspected hack.
The company filed for Chapter 11 bankruptcy protection on Friday after a week chaotic. The exchange, run by 30-year-old Sam Bankman-Fried, has been accused of misusing client funds and nearly being acquired by its biggest rival after a liquidity crisis.
