CZ: El Salvador Has No Exposure to FTX

Michael Novogratz, the CEO of Galaxy Digital, stated in an interview with CNBC on Thursday that the El Salvadoran government has its crypto on the troubled crypto exchange FTX.

“I don’t know if it’s true that the El Salvadoran government crypto was on FTX, and they were calling for extradition of [Sam Bankman-Fried],” he said.

However, Changpeng Zhao (CZ), the founder of leading crypto exchange Binance, tweeted shortly after that the claim by Novogratz was false.

Man, the amount of misinformation is insane.

I exchanged messages with President Nayib a few moments ago. He said “we don’t have any Bitcoin in FTX and we never had any business with them. Thank God!” https://t.co/CrM5wd24Ha

— CZ ???? Binance (@cz_binance) November 10, 2022

El Salvador and Bitcoin

El Salvador’s adoption of Bitcoin dates back to September 2021. It became the first country in the world to adopt Bitcoin as a legal tender.

The development was met with disapproval from various agencies and regulatory bodies. On several occasions, U.S. lawmakers have criticized the El Salvadoran government’s actions regarding its Bitcoin adoption. In January, the International Monetary Fund (IMF) urged the country’s government to reverse its Bitcoin adoption.

Even with the backlash, El Salvador continues to be bullish on Bitcoin. This has helped the country’s economy, as an April report showed that the government reported a 30% increase in a 30% increase in tourism.

El Salvador has also embarked on a Bitcoin purchasing spree. In July, the government bought $1.5 million worth of BTC, bringing its total holdings to 2,381 BTC, which was equivalent to $46.2 million at the time.

Galaxy’s Exposure to FTX

Novogratz’s comments on CNBC came while he shared how his company was affected by the financially crippled FTX. Recall that Galaxy Digital had revealed a $77 million exposure to FTX in its Q3 earnings report. The company, however, noted that $47.5 million is underway to be withdrawn from the exchange.

Meanwhile, the troubled FTX continues to source financial support from investors. Sam Bankman-Fried (SBF) announced that he would be conducting a raise next week.

On Thursday, Justin Sun, the founder of Tron Blockchain, revealed he was working with SBF to tackle liquidity crunches. Around the same time, the exchange enabled withdrawals of cryptocurrencies linked to the Tron blockchain.