FTX Legal Department Jumps Ship, Binance Deal Fizzles Out

The FTX drama continues as the deal with its competitor Binance falls apart. According to several reports, employees at the platform are fleeing amid growing concerns about a massive $6 billion hole on the company’s balance sheet.

A report from Semafor indicates that FTX’s legal and compliance staff left en masse as the company announced its deal with Binance. The report cites people familiar with the matter speculating on the company’s hurdles to completing any agreement without a legal staff. 

Across social media, users began reporting that websites related to FTX and its trading arm Alameda were close. In addition, top executives went silent, seemingly escaping from what appears as the collapse of another major crypto institution. 

FTX’s insolvency caught institutions and big players by surprise. The company saw many top representatives quitting their positions over the past months as U.S. regulators launched an investigation against the trading venue and its founder Sam Bankman-Fried. 

Still, a large portion of crypto investors and employees remain in disbelief. The exchange halted new withdrawal requests on Tuesday. However, it continues to see deposits. 

According to Wu Blockchain, FTX employees have their tokens stuck on the platform: 

Several FTX employees told us that their coins cannot be withdrawn in FTX, and have no idea of the relationship between Alameda and FTX, some employees even continue to buying FTT in these days because the trust of company. They felt that the SBF needed to explain.

At the time of writing, FTX’s website issues no warning about the current situation. This situation could jeopardize new users or users making deposits. 

Not even that, there is no warning or news any where on the site about no withdrawal, or about potential acquisition.

Called this out right away and its still going.

It’s fucking criminal.

If you don’t follow news, you might just think coins are down bad.

— Adam Cochran (adamscochran.eth) (@adamscochran) November 9, 2022 

Merely days before the drama, FTX’s official Twitter handle posted videos about the several offices in construction across the world. The crypto company would inaugurate offices in Tokyo, Miami, the Bahamas, and other locations. 

More room for builders ready soon at @FTX_Official Bahamas HQ pic.twitter.com/mP2chek0NJ

— Claire Watanabe (@claire_FTX) November 6, 2022 

Conversely, Bankman-Fried constantly tweeted about his weekly FTT purchases, the exchange’s native token. In hindsight, the posts seem like a marketing stunt to lure retail investors into purchasing the token and preventing the subsequent fallout. 

FTT has been one of the most affected tokens in the crypto market. Binance’s CEO compared the token with Terra’s failed cryptocurrency LUNA. At the time of writing, FTT’s price trades at $3.2 with massive losses across the board.