Get 40% Off
⚠ Earnings Alert! Which stocks are poised to surge?
See the stocks on our ProPicks radar. These strategies gained 19.7% year-to-date.
Unlock full list

Months to Collapse, FTX Offered 8% Interest on USD & BTC Deposits

Published 11/13/2022, 02:37 AM
Updated 11/13/2022, 03:00 AM
© Reuters Months to Collapse, FTX Offered 8% Interest on USD & BTC Deposits

  • FTX offered 8% interest on USD deposit product a few months before its collapse.
  • Binance CEO said people should avoid businesses that offer high incentives for locking tokens.
  • The embattled exchange has liabilities of $10 to $50 billion with over 100,000 creditors.

Every day, more information pops up regarding the events leading up to the FTX crypto exchange’s bankruptcy last week. According to a report, the embattled FTX exchange had launched a USD deposit product, offering an 8% interest rate.

Additionally, it offered a Bitcoin (BTC) deposit product with an interest rate of 5% and above. Consequently, many users deposited tokens, leading others to secure bank loans to take advantage of the offer, according to Collin Wu’s media.

Expectedly, the crypto community criticized the move, but the event did not receive widespread attention. FTX filed for Chapter 11 bankruptcy protection last Friday after it became clear that the exchange was insolvent and could not honor users’ withdrawal requests.

On the eve of its filing, Changpeng Zhao, the CEO of the largest crypto exchange, Binance, counseled the crypto community. Zhao said:

Avoid businesses, exchanges, and projects that survive by selling owned tokens, offer high incentives for locking tokens, or have an ample token supply but only a small circulation supply.

Unfortunately, all of what the Binance CEO counseled against are true for the bankrupt FTX exchange. The firm claimed in its bankruptcy filing that it has assets worth between $10 billion and $50 billion, liabilities between $10 billion and $50 billion, and more than 100,000 creditors.

The news of its insolvency triggered a wave of price crashes, putting Bitcoin at a two-year low of $15k within a week. Its native token, FTT, plunged 30% on Friday, bringing its collapse this month to 91%.

The post Months to Collapse, FTX Offered 8% Interest on USD & BTC Deposits appeared first on Coin Edition.

See original on CoinEdition

Latest comments

Nobody needs a loan to invest in BTC
People should not be allowed to take loans out to invest its ridiculous
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.