While Bahamians are given priority for withdrawing funds on FTX, some investors outside the archipelago have used NFTs as currencies to circumvent barriers.
NFTs as a temporary solution to FTX blockages
Tough situations spur creativity, and the use some investors have made of non-fungible tokens (NFTs) on FTX underscores this principle. Indeed, while users in the Bahamas have certain facilities for withdrawing their funds, NFTs served as currencies to unlock other investors based outside the archipelago.
For this, people wishing to circumvent the restrictions bought NFTs from Bahamians for the amount they wanted to withdrawthen the agreed sum could be sent to external wallets.
This ingenious manipulation was notably spotted by a Twitter user. In total, 50 million dollars would have leaked in this way. Note also that even the FTX teams were surprised by this application case, if we are to believe their response to this tweet:
lmao guess who just found out how 50m just flowed out of FTX https://t.co/UPj6IXC7U6 pic.twitter.com/WYOk7CMtSu
— nick 🦑 utxo.club (@utxoclub) November 11, 2022
Earlier in the morning, Coby, the crypto influencer who hosted a surreal live three days ago, first wondered on an address withdrawing large amounts of USDT for a value of several million dollars:
Can anyone explain what is happening with this address?https://t.co/dLhCoqA9Fd
It is withdrawing millions of Tether from FTX and sending them to 0x18df7b342cdd4e7db0def4546c0ed01e79fd207e
Currently $21m withdrawn.
—Cobie (@cobie) November 11, 2022
Since these operations were revealed, it is no longer possible to operate in this way on the FTX.com site, which displays an information banner on this subject. It should also be noted that such a maneuver required blind trust on the part of investors in the third party making the withdrawals.
To withdraw funds if you do not reside in the Bahamas, there remains, for the moment, the solution of tokens from the Tron ecosystem, although this is very imperfect and requires a financial sacrifice.
👉 To make sure you don’t miss anything about the FTX affair – Find our specially dedicated live
Alyra, training to integrate the blockchain ecosystem ⛓️
Receive a summary of crypto news every Monday by email 👌
What you need to know about affiliate links. This page presents assets, products or services relating to investments. Some links in this article are affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no impact on you and you can even get a bonus by using our links.
Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and could not be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky in nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.