- Kraken holds around 9,000 FTT tokens on the FTX exchange.
- Claims to not be affected by FTX’s downfall “in any material way.”
- The exchange has no exposure to Alameda Research.
- Kraken said it’s done two proof of reserve audits in the last year.
Kraken, one of the top centralized crypto exchanges in the world, has published a statement in which it revealed that it holds about 9,000 FTT tokens on the insolvent FTX exchange. They are worth around $27,000 at the time of writing.
FTT is currently trading at around $3, up almost 100% on the day but down about 90% in the last few days, according to data from CoinGecko.
The exchange also reassured its users and investors that it’s not affected by the FTX fallout “in any material way” and hasn’t listed FTT on its spot or futures exchanges.
Kraken, whose co-founder and former CEO Jesse Powell stepped down in September, also said it has zero exposure to Alameda Research, the crypto trading firm closely tied to FTX that’s also rumored to be insolvent.
The exchange said it is the pioneer behind regular asset audits. They claim to have done two proof of reserve audits in the last year. Proof of reserve audits “are more precise and immutable than any other form of financial statement”, according to Kraken.
Kraken’s statement comes amid speculation as to which entities have been affected by the FTX blow-up. One of them is Sequoia Capital, one of the largest venture capital funds. They announced that they have marked their investment of over $210 million in FTX to $0.
FTX has an $8 billion hole in its balance sheet, according to the Wall Street Journal. On Monday, Binance announced that it signed a non-binding letter of intent (LOI) to acquire the troubled competitor. But only 48 hours later it withdrew from the deal, citing “mishandled customer funds and alleged U.S. agency investigations.”
With the Binance deal falling through, FTX CEO Sam Bankman-Fried turned to TRON’s founder and crypto billionaire Justin Sun. The two are reportedly trying to make a deal to save FTX from bankruptcy.
On the Flipside
- It’s unclear what Kraken will do with its 9,000 FTT tokens.
- The ripple effect of FTX’s fallout is still unknown.
Why You Should Care
Kraken is one of the largest centralized crypto exchanges in the world. Its reassurance that it has minimal to no exposure to FTX and Alameda Research offers a rare respite to the crypto community. However, investors should do their own due diligence when deciding where to trade and hold their funds.
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