Liquid, a crypto exchange based in Japan has just made an announcement causing fear among Japanese investors. As per the exchange officials, they have paused the withdrawals feature for investors.
Liquid Halts Withdrawals
The exchange has announced that they have been facing many issues related to centralized cryptocurrency exchanges. Due to the ongoing crisis, they have decided to halt the withdrawals.
The most concerning part about the Liquid exchange is that it is owned by FTX. It was on November 15 when the announcement was made by the Liquid Global platform.
The officials announced that they have suspended the withdrawals for both crypto and fiat currencies.
The reason behind the Halts on Withdrawals
The officials at the Liquid exchange have confirmed that they have made the decision based on the happenings involved in the United States.
As the main brand “FTX” has filed Chapter 11 bankruptcy in the United States, they are required to comply with the bankruptcy guidelines accordingly.
According to the teams, they have implemented the halt, not as a security measure. They will be providing more information pertaining to the withdrawals but it will be done at a later date.
In addition to communicating the halt, the exchange has also advised its users not to attempt to make any deposits. The intimation suggests that the user should neither attempt a crypto nor a fiat deposit.
They will be sharing updates in regard to the matter and the users must stay put until that happens.
Shocking News for Liquid Customers
The Liquid customers feel that they have been misled by the Liquid exchange. This is because when the FTX collapse happened, Liquid officials claimed that they were not going to face any contagion.
The business executives provided assurances that their platform is not impacted by the crash at all. FTX exchange halted withdrawals on their website on November 10.
Just after five days of making claims about having no financial dependency on FTX, Liquid has made the same announcement. Now the exchange says they are to comply with the bankruptcy being faced by FTX.
Amidst the chaos, several entities owned by FTX are coming under regulatory fire for doing the same.
It is not just Liquid in Japan that has halted withdrawals but FTX Japan, FTX Australia, and FTX US have done the same.
This disproves the claims made by the FTX executives that there is no contagion due to the FTX crash. As the contagion keeps spreading, more and more investors will be stuck with their funds on the exchanges.
The matter would keep getting worse for the cryptocurrencies and the firms connected with FTX. Whenever a piece of news rotates about a firm linked with FTX, facing major issues, its FTX Token faces a dip.
The report shows that in the past 24 hours, the price of FTX has declined by 5.99%.