Due to the situation that recently occurred with a digital asset Exchange called FTX, which is the issuer of FTX Token (FTT), Bitkub Online Co., Ltd. (“the Company”) would like to clarify the facts of the situation to serve as an information source for our customers and investors, as well as clarification of the Company's operating guidelines for FTT. The details are as follows.
FTX situation sequence
- On 7 November 2022, Zhao Changpeng (Chief Executive Officer of Binance) posted on his Twitterthat he would sell all of his FTX Token (FTT) which Binance currently held 23 million FTT, worth approximately $580 million due to “a recent emerging fact”. Zhao later added that this action was “just post-exit risk management, learning from LUNA”.
- Zhao stated that selling off his whole FTT would take a few months to complete, and he would try to minimize the impact of this liquidating on FTX.
- After news broke that FTX subsidiary, Alameda Research, had a liquidity crisis that prompted Binance to sell off its entire FTT, Zhao posted on Twitter that he had signed a non-binding Letter of Intent (LOI) to Sam Bankman-Fried (Chief Executive Officer and Founder of FTX) to help eliminate a major liquidity crisis. Binance would, however, conduct a full due diligence review first.
- As a result of this incident, CoinDesk reported on the volatility of the digital asset market that initially the price of FTT increased 20% from $14.50 to $17.50. However, Cointelegraph later reported that the business deal had created massive volatility in the prices of other tokens in the market as well. In the evening of 6 November 2022 (Thailand time), the price of Bitcoin (BTC) dropped to $18,347.
- In the morning of 10 November, Binance announced on Twitter that Binance decided to not pursue the potential acquisition of FTX as a result of corporate due diligence.
- Later on the day, FTX announced that they had temporarily suspended the crypto withdrawals on the FTX platform until further notice.
- Bloomberg reported that Sam Bankman-Fried, the CEO and founder of FTX, may have to file for bankruptcy if FTX was unable to find cash to enhance liquidity in time. Sam announced to the investors that the company was currently short of $8 billion. The US financial regulators, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), already started investigating FTX over the fact that FTX used deposits of its customers to take advantage or not.
In this regard, the Company would like to inform you about the operating guidelines of Bitkub Exchange for FTT as follows:
- The deposit, withdrawal, and trading (buy-sell) of FTT are still available as usual on our platform. However, if there are any changes in the future, such as if the price of FTT significantly drops which leads to high risks for our customers, the Company may consider suspending the trades of FTT on the Bitkub Exchange platform temporarily, etc. The Company will then publish further announcements to inform our customers in advance before proceeding with any changes.
- The Company is in the process of contacting the token issuer through the official channel to request clarifications on the aforementioned issues and further action guidelines.
- Please do your research to understand the risks before trading FTT and exercise caution when investing. Due to price volatility, the Company highly recommends you study the FTT whitepaper, and closely follow the news from the official channel of the token issuer at https://twitter.com/FTX_Official.
- This announcement is a notice to encourage investors to be cautious in trading digital assets only. The Company is not responsible for and does not certify or confirm the accuracy, completeness, correctness, currentness, or reliability of the information contained in this announcement including any information of any third parties. In addition, the Company does not consider any information published as legal advice or opinion, and shall not be regarded as giving advice on trading or investments in digital assets. All investment decisions are the sole decisions of the investors, and the investors should learn more about the details of digital assets before making investment decisions.
- If the price of FTT falls below 0.0001 THB which is the minimum price that our trading system supports, the Company will consider temporarily suspending the trading of the token. Further announcements will be published in advance before we take further action regarding the matter.
- Investments in digital assets contain high risks. Please be advised to research properly and thoroughly, and make a careful decision before taking any action, especially during the volatility of the digital asset market. Please note that the Company is not responsible for any loss or damages, or profits and losses from investing in digital assets related to this announcement and/or from the use of the information contained in this notice.
- The Company reserves the right in its sole discretion to amend or change these announcement details, and we will further notify you if there is any change.
We apologize for any inconvenience caused and thank you for your continual trust in the Company.
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