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FTX founder and former CEO Sam Bankman-Fried is trying to raise new capital to make clients whole despite the bankruptcy filing.
In a recent Twitter thread, he has been “meeting in person” with both potential investors and regulators about what they can do for clients. “And then, investors. But first, customers,” he said.
He also provided some context around the sudden fall of FTX and how being one of the most powerful players in the crypto exchange industry left a $9 billion hole in its balance sheet.
“A few weeks ago, FTX was handling ~$10b/day of volume and billions of transfers. But there was a lot of leverage – much more than I realized. A run on the bank and a market crash wiped out the liquidity. So What can I try to do? Increase liquidity, perfect customers and start again,” he said.
SBF said the company currently has less than $8 billion in liquid assets, more than $5.5 billion in semi-liquid assets, and another $3.5 billion in illiquid assets. So it is trying to raise $9 billion to cover the company’s $9 billion worth of semi-liquid and illiquid assets for now.
In a separate report from the Wall Street Journal Confirmed That SBF is going from one investor to another in an attempt to raise funds. The report claims that efforts to bridge that gap have so far been unsuccessful.
Speculation about FTX and Almeida’s health increased Last week came after reports revealed that the investment firm’s balance sheet is loaded with FTT tokens, FTX’s native token which has plunged more than 90% in the past week.
By the end of the week, FTX announced That it has filed for Chapter 11 bankruptcy in Delaware. Notably, FTX US was also implicated in the proceedings, despite claims by the former CEO that their US exchange was fine.
Companies under bankruptcy protection sometimes receive loans to help maintain operations. Borrower-in-possession funding means that if the companies survive, the first money they earn will go toward paying off that lifeline, the WSJ said.
As reported, FTX lent $10 billion Value of client assets for making risky bets by its affiliated trading firm, Alameda Research. Since FTX held $16 billion in customer assets, the exchange lent out more than half of its customers’ funds.
The Recent Drama Around FTX Has Set The Stage For One Of The Worst crypto price crash throughout the last year. The flagship cryptocurrency has been trading around the $16,000 mark for the past week, a level not seen in two years. The broader crypto market is also down at least 20% over the past 10 days.
