FTX said it reached an agreement with Justin Sun’s Tron that will allow users to withdraw some tokens from the troubled exchange.
(Bloomberg) — FTX said it reached an agreement with Justin Sun’s Tron that will allow users to withdraw some tokens from the troubled exchange.
Tron is in fundraising talks with Sam Bankman-Fried’s FTX, Sun told Bloomberg News.
Sun declined to comment on an amount.
As part of this agreement, initially $13 million of assets will be deployed to facilitate such swaps. Information on future capital injections will be shared on a weekly basis.
Holders of TRX, BTT, JST, SUN and HT tokens will be allowed to swap those assets on a one-to-one basis to external wallets.
The price of the native token used on the Tron blockchain surged earlier on the embattled platform after Sun disclosed the preliminary talks.
Tron jumped to $2.50 from around 6 cents on FTX on Thursday.
The token traded much lower on other platforms, and was trading recently around 6 cents, according to pricing date on Bloomberg.
“Justin Sun’s offer to help FTX users withdraw funds seems nice enough, but it is unclear how it would work,” Kunal Goel, a research analyst at digital-asset firm Messari, said before the official announcement.
“FTX has thin liquidity for the Tron ecosystem tokens that can be redeemed, and market makers are unlikely to deposit more funds to balance the prices with the broader market. As such, prices have been highly volatile for these markets on FTX.”
The exchange was catapulted into a crisis after Changpeng “CZ” Zhao, founder of rival Binance Holdings Ltd., announced plans to sell some $530 million worth of FTX’s utility token FTT, citing “recent revelations.” Binance had received the tokens when it sold a stake in FTX last year.
FTT plunged soon after.
–With assistance from Carly Wanna, David Pan and Sidhartha Shukla.
(Adds information in TRX token trading.)
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