Mass exodus of Bitcoin withdrawals following FTX saga

Last Updated on 1 hour by cryptoevent

After a series of headlines related to the FTX saga, exchanges have seen a mass exodus of users storing Bitcoin on their platforms. Exchanges based in the United States have taken a particularly big hit as many users have withdrawn their bitcoin.

According to on-chain data source Coinglass, leading platforms including Coinbase, Binance, and Gemini expect Bitcoin balances to be reduced by up to 80% over the past 30 days.

Bitcoin movement: from exchange to self-custody

Amid the uncertainty in the security and regulatory protocol as a result of the FTX explosion, users’ attention has been drawn to storing their cryptocurrency in ways other than centralized crypto exchanges.

In response, more than $3 billion worth of cryptocurrencies have been moved from platforms to self-custody services. Many users have been looking to hardware wallets like Ledger and Trezor to store their crypto assets offline. While industry leaders have warned about the security of online platforms in the past, the FTX saga seems to have highlighted the damage that centralized storage can cause. Over the past week, most major exchanges have seen net withdrawals of bitcoin — a drop in storage that hasn’t kept pace with deposits as people buy digital funds from exchanges.

Gemini represents the largest reduction, with user withdrawals cumulatively approaching 30,000 Bitcoin. Kraken, Binance, and Coinbase have seen a similar withdrawal rate. This US stock market crisis is predicted to coincide with both the FTX scandal and the regulatory uncertainty in the country. Within the last week, regulators have announced there will be a hearing to probe exactly what happened in the stock market, with a call for the extradition of former CEO Sam Bankman-Fried from the Bahamas, where he is said to be fleeing to Dubai . According to US House Financial Services Committee Chair Maxine Waters, the FTX crash not only left traders caught in the crossfire with a problem, but also vulnerable users who used the platform to invest and store their funds:

“The fall of FTX has caused tremendous damage to over a million users, many of whom were just ordinary people who poured their hard-earned life savings into the FTX cryptocurrency exchange only to watch it all disappear in a matter of seconds.”

The post-FTX saga mass post-exodus of bitcoin withdrawals first appeared on Coin Insider.

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