In recent news, Sam Bankman-Fried is attempting to put together a rescue plan of up to $9.4 billion for his struggling cryptocurrency exchange, FTX.
SBF Reaches Out To Industry Stalwarts
Bankman-Fried is considering collecting roughly $1 billion from Justin Sun, the creator of the TRON cryptocurrency, $1 billion from the crypto exchange OKX, $1 billion from USDT issuer Tether, and $2 billion from a group of investment firms.
According to reports, SBF has not made much headway toward assembling the rescue package yet. However, he has also refrained from declaring bankruptcy and declined to appoint advisors for restructuring the company.
The situation seems to be pretty dynamic, and the decisions could flip very quickly.
FTX Inks Deal With Justin Sun
In a recent tweet, the cryptocurrency exchange FTX announced its agreement with Justin Sun’s TRON network, which will allow TRX holders and a few other tokens to swap assets from FTX to other third-party wallets. As per the details shared by the exchange, the function will be activated at 18:30 UTC on November 10, 2022.
FTX further stated,
“The exact capacity of the Tron Token facility will be determined weekly and future injections will occur at 14:00 UTC. The amount to be deposited will depend on a number of factors such as withdrawal demand,”
Read More: FTX Japan Ordered by Regulator to Suspend Operations
The team would make a $13,000,000 initial deposit to be used for swaps. A weekly announcement detailing future capital infusions will also be made by FTX. They also advised users to exercise caution because the swap may cause TRX, BTT, JST, SUN, and HT to exhibit high price volatility.
FTX Announcement Regarding the Tron Credit Facility:
We are pleased to announce that we have reached an agreement with Tron to establish a special facility to allow holders of TRX, BTT, JST, SUN, and HT to swap assets from FTX 1:1 to external wallets.
— FTX (@FTX_Official) November 10, 2022
Concerns Raised Over The Deal
However, Ki Young Ju, CEO of CryptoQuant raised serious concerns over the FTX-TRON deal, citing it to be illegal. He reasoned that, this would only lead to a price jump of the TRON token on FTX and Justin Sun being able to sell them at a higher price.
Isn't it illegal?
1/ FTX allows withdrawals only for TRX & TRC20.
2/ Users exchange assets to TRX to request withdrawals.
3/ TRX price goes up like 50x in FTX.
4/ Justin deposits TRX into FTX and sells them.
5/ FTX users sell TRX in other exchanges with a significant loss. https://t.co/FKCV5IoGUu pic.twitter.com/91zrLugiuu
— Ki Young Ju (@ki_young_ju) November 10, 2022
And therefore, despite the new deal, it’s still unknown how the exchange will be able to sustain going forward.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.