While many crypto traders wait with bated breath to learn the fate of their funds trapped on the failing FTX exchange, Justin Sun, the founder of Tron, may be preparing to throw a lifeline to FTX’s stranded customers.
On Nov. 10, Sun tweeted that his team is “putting together a solution” to address the ongoing liquidity crunch on FTX.
“My team has been working around the clock to avert further deterioration,” Sun said. “I have faith that the situation is manageable following the wholistic approach together with our partners. Stay tuned.”
FTX and its sister firm Alameda Research have faced increasing scrutiny regarding their asset reserves and intertwinement since Nov. 2, prompting users to withdraw more than $1B from the platform over just seven days, according to Dune Analytics. With the backlog of withdrawals piling up, FTX conceded that it does not have the funds on hand to process all of the requests.
The exchange now appears to be seeking a buyer, with a potential deal with top centralized exchange Binance falling through on Nov. 8. Meanwhile, users’ assets are stranded on the platform, escalating fear and uncertainty in the crypto markets and community.
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While many onlookers are heaping praise on Sun, some are skeptical of Sun’s offer with FTX reportedly underwater to the tune of $8B.
“Good for you if you are genuine about this but I don’t know how this is possible,” replied Twitter user TheJinKang. “Theoretically, >$6B+ worth of tokens would be swapped… Do you have the liquidity?”
“I think they’re doing stuff in addition to helping out token holders,” tweeted digital asset trader TheCryptoData. “I think it’ll help out other people as well who are just holding USD.”
Others believe Sun is just reaffirming his commitment to support Tron token holders with assets trapped on FTX. “You live in a fantasy world,” replied AltcoinAlterEgo.
On Nov. 9, Tron DAO and Huobi, a centralized crypto exchange whose board Sun recently joined, announced they will allow FTX users to redeem TRX, BTT, JST, SUN, and HT tokens that are trapped on the exchange. Affected users can fill out a form on Huobi’s website.
“No matter how things evolve, Tron DAO and Huobi will do their best to support the exchange of the TRON tokens (TRX, BTT, JST, SUN, HT) deposited on the FTX platform at a 1:1 ratio, including during the worst-case scenario that we all know may happen,” the blog said. “It is our overriding principle to protect the interests of all Tron token holders.”