FTX US Freezes Crypto Withdrawals, Sending Millions in Assets to Bankruptcy Limbo

FTX US ceased processing withdrawals around midday Friday, per the on-chain data for the exchange’s hot wallet and a source familiar with the matter.

The manual shutdown occurred shortly after midday New York time, the source said. Hot wallets associated with the exchange still held millions of dollars in assets at that time.

FTX declined to comment.

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.

Read more: FTX Employees Worldwide Learned of Bankruptcy Along With the Public

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.