Jitters spread around crypto market amid FTX founder arrest

Further jitters reverberated through the crypto market today amid the arrest of Sam Bankman-Fried, the founder of bankrupt exchange FTX, as senior figures in the crypto world instructed traders to “ignore” widespread fear and uncertainty.

Net withdrawals from the world’s largest crypto exchange, Binance, have spiked to $1.6 billion (£1.3 billion) in the past 24 hours, according to data analytics platform Nansen, almost reaching the volumes of withdrawals in the immediate aftermath of the FTX collapse, while the value of Binance’s token, BNB sunk almost 6%.

Earlier, Binance had sought to reassure customers it had enough reserves to support customer funds by commissioning a “proof of reserves” report by French accountancy firm Mazars.

But Douglas Carmichael, a former head of US audit watchdog, the Public Company Accounting Oversight Board, told the Wall Street Journal it would be a “gross misrepresentation to call this an audit.”

Changpeng Zhao, the billionaire founder of crypto exchange Binance, tweeted: “Ignore FUD. Keep Building!” in reference to an abbreviation for ‘fear, uncertainty and doubt’ widely used by crypto traders on social media.

“There has hardly been a week going by without some FUD. We learned the ability to ignore them or keep building”, he said.

US authorities have said Bankman-Fried has been arrested in the Bahamas at the request of the US government.

Mr Bankman-Fried is under criminal investigation by US and Bahamian authorities following the collapse last month of FTX. The firm filed for bankruptcy on November 11, when it ran out of money after the cryptocurrency equivalent of a bank run.