FTX US Temporarily Froze Crypto Withdrawals, Adding to Chaos of Bankruptcy Proceedings

The exchange filed for bankruptcy protection earlier Friday.

By Danny Nelson, Nikhilesh De

Nov 11, 2022 at 7:00 p.m. UTC

Updated Nov 14, 2022 at 5:07 p.m. UTC

Danny Nelson

Danny is CoinDesk's deputy business editor. He owns BTC, ETH and SOL.

Follow @realDannyNelson on Twitter

Nikhilesh De

Nikhilesh De is CoinDesk's managing editor for global policy and regulation. He owns marginal amounts of bitcoin and ether.

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UPDATE (Nov. 11, 2022, 21:53 UTC): FTX US appeared to reverse its manual shutdown later Friday.

FTX US temporarily ceased processing withdrawals around midday Friday before inexplicably restarting hours later, adding to the confusion of a chaotic week that saw the ouster of exchange CEO Sam Bankman-Fried.

The manual shutdown occurred shortly after midday New York time, according to a person familiar with the matter as well as on-chain data. But later Friday the exchange appeared to resume processing withdrawals.

FTX Group filed for bankruptcy protection in the U.S. earlier Friday, including FTX US – a day after FTX CEO Sam Bankman-Fried tweeted that FTX US had no financial exposure to FTX’s “liquidity” issues.

FTX itself had halted withdrawals earlier this week, though customers in certain jurisdictions, such as Japan, the Bahamas and Turkey – were able to begin withdrawing some funds by Friday.

It’s unclear what will happen to these funds. While an initial bankruptcy filing suggested that unsecured creditors – meaning FTX’s customers – would be able to receive their assets, FTX is also reportedly facing a $10 billion hole (and indicated that its liabilities exceed that figure).

FTX US on Thursday warned users it might halt trading in the coming days, but said withdrawals would not be impacted.

“Withdrawals are and will remain open,” a notice on its website said. The notice was still on the website at press time.

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