FTX on Thursday said it will open a Tron credit facility to allow holders of TRX, BTT, JST, SUN, and HT to remove their assets from the platform.
"As part of this agreement, we will be disabling Tron deposits for all users during this period. The only deposits will be the pre-announced deposits conducted weekly by the Tron Team. Initially, $13,000,000 of assets will be deployed to facilitate such swaps," the exchange said.
The development comes after founder of the Tron cryptocurrency network, Justin Sun, publicly stepped into the unfolding saga Wednesday evening.
Sources familiar with the matter told Yahoo Finance of Sun's plan that “for now, the focus is to protect all the TRON ecosystem token holders and facilitate a place to resume withdrawals."
While FTX reportedly resumed customer withdrawals Thursday, its unravelling this week continues to send tremors through the crypto world as analysts guess which entities have exposure to the troubled exchange.
Further to my announcement to stand behind all Tron token (#TRX, #BTT, #JST, #SUN, #HT) holders on #FTX, we are putting together a solution together with #FTX to initiate a pathway forward. @FTX_Official
— H.E. Justin Sun🌞🇬🇩🇩🇲🔥 (@justinsuntron) November 10, 2022
FTX Founder and CEO Sam Bankman-Fried said earlier Thursday that the company is seeking other means to make up for the hole in its balance sheet after Binance called off a much-needed bailout for the troubled crypto exchange.
"There are a number of players who we are in talks with," Bankman-Fried tweeted on Thursday, stressing the greatest priority will be redeem customer deposits.
"We'll see how that ends up."
The week started with FTX's exchange token (FTT), which grants traders fee discounts, plummeting in value. After a Twitter spat with rival exchange Binance from Sunday through Tuesday, which sparked a surge in customer withdrawals, customers were shocked to discover FTX was slowing customer withdrawals as of Tuesday morning.
On Tuesday, Binance’s founder and CEO Changpeng Zhao along with Bankman-Fried announced that the two companies had struck a non-binding agreement for Binance to buy FTX.com [link]. By Wednesday afternoon, Zhao called off the deal.
“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” Binance said in an official statement shared with Yahoo Finance.
Investors continue to watch how far the fallout from FTX could spread.
For instance, Galaxy Digital and Multicoin Capital have both said they still have funds with the platform.
A person familiar with Galaxy Digital's situation said the company's $77 million in money it has with FTX is less than 15% of its current total exposure on crypto exchanges.
And last year, FTX raised at least $1.72 billion in funds from venture capitalists, including BlackRock, Sequoia Capital, Paradigm, Lightspeed Ventures, Temasek, Tiger Global, Circle, Multicoin Capital and the Ontario Teachers Pension Plan, according to Crunchbase.
On Wednesday night, Sequoia shared a letter to clients with Yahoo Finance that it also released over Twitter showing that the Silicon Valley powerhouse would write off its total investment into FTX through two different funds from $213.5 million to $0.
“We do not take our responsibility lightly and do extensive research and thorough due diligence on every investment we make. At the time of our investment in FTX, we ran a rigorous due diligence process,” Sequoia told clients, noting that last year FTX generated approximately $1 billion in revenue and more than $250 million in operating income.
Updated with FTX/Tron announcement.
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David Hollerith is a senior reporter at Yahoo Finance covering the cryptocurrency and stock markets. Follow him on Twitter at @DsHollers
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