FTX sets up credit facility with Tron to allow certain crypto holders to remove assets
FTX said on Thursday that it will open a Tron credit facility to allow holders of TRX, BTT, JST, SUN and HT to remove their assets from the platform.
“As part of this agreement, we will disable Tron deposits for all users during this period. The only deposits will be the pre-announced deposits performed weekly by the Tron team. Initially, $13,000,000 of assets will be deployed to facilitate such exchanges,” the exchange said.
The development comes after the founder of cryptocurrency network Tron, Justin Sun, publicly weighed in on the saga unfolding on Wednesday night.
Sources familiar with the matter told Yahoo Finance of Sun’s plan that “for now, the focus is to protect all TRON ecosystem token holders and facilitate a place to resume withdrawals.”
While FTX reportedly resumed customer withdrawals on Thursday, this week’s unraveling continues to send tremors through the crypto world as analysts guess which entities have exposure to the troubled exchange.
FTX founder and CEO Sam Bankman-Fried said earlier Thursday that the company is seeking other funds to make up for the hole in its balance sheet after Binance canceled a much-needed bailout for the troubled crypto exchange.
“There are a number of players that we are in talks with,” Bankman-Fried tweeted on Thursday, stressing that the biggest priority will be redeeming customer deposits.
– We’ll see how it ends.
The week started with FTX’s exchange token (FTT), which gives traders fee discounts, plummeting in value. After a Twitter spat with rival exchange Binance from Sunday to Tuesday, which triggered a surge in customer withdrawals, customers were shocked to discover that FTX slowed customer withdrawals from Tuesday morning.
On Tuesday, Binance founder and CEO Changpeng Zhao along with Bankman-Fried announced that the two companies had entered into a non-binding agreement for Binance to acquire FTX.com https://news.google.com/__i/rss/rd/articles/CBMiP2h0dHBzOi8vZmluYW5jZS55YWhvby5jb20vbmV3cy9iYW5rbWFuLWZyaWVkLWZ0eC0xNzIwMjQ1OTEuaHRtbNIBAA?oc=5. On Wednesday afternoon, Zhao terminated the agreement.
“Initially, our hope was to be able to support FTX’s customers in providing liquidity, but the issues are beyond our control or ability to help,” Binance said in an official statement shared with Yahoo Finance.
Investors continue to see how far the fallout from FTX can spread.
For example, Galaxy Digital and Multicoin Capital have both said they still have funds with the platform.
A person familiar with Galaxy Digital’s situation said the company’s $77 million in cash it has with FTX is less than 15% of its current total exposure to crypto exchanges.
And last year, FTX raised at least $1.72 billion in funding from venture capitalists including BlackRock, Sequoia Capital, Paradigm, Lightspeed Ventures, Temasek, Tiger Global, Circle, Multicoin Capital and the Ontario Teachers Pension Plan, according to Crunchbase.
On Wednesday evening, Sequoia shared a letter to clients with Yahoo Finance that also released over Twitter showing that the Silicon Valley powerhouse would write down its total investment in FTX through two different funds from $213.5 million to $0.
“We do not take our responsibility lightly and do extensive research and thorough due diligence on every investment we make. At the time of our investment in FTX, we ran a rigorous due diligence process,” Sequoia told clients, noting that last year FTX generated approximately $1 billion in revenue and more than $250 million in operating income.
Updated with FTX/Tron announcement.
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David Hollerith is a senior reporter at Yahoo Finance covering cryptocurrency and stock markets. Follow him on Twitter at @DsHollers
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