FTX fundraising: Can crypto golden boy Sam Bankman-Fried raise $4bn to save his crumbling empire?
16:06, 10 November 2022
As British Prime Minister Harold Wilson once said, “A week is a long time in politics”. The same can be said for crypto.
It wasn’t long ago that Sam Bankman-Fried, founder and CEO of cryptocurrency derivatives exchange FTX, was seen as an influential figure in the crypto industry.
As of 10 November 2022, FTX is facing bankruptcy due to a “significant liquidity crunch”.
Bankman-Fried says the company has a shortfall of $8bn (£7.02bn) but needs $4bn (£3.5bn) to remain solvent, an FTX investor told Bloomberg.
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What are the options on the table?
Binance, the world’s largest cryptocurrency exchange by trading volume, pulled out of its bailout deal with FTX on 9 November.
This has left FTX in a position where bankruptcy is very possible, to such an extent that Bankman-Fried said via Twitter: “I fu*ked up and should have done better.”
However, the FTX CEO has been offered a potential lifeline from Justin Sun, the founder of Tron (TRX).
Sun said that he wishes to stand behind all TRX and Huobi Token (HT) holders on FTX and is ”putting together a solution with FTX to initiate a pathway forward”.
He added that “the ongoing liquidity crunch, despite [being] short term in nature, is harmful to industry development and investors alike”.
Sun said that “ark building is well under way, the modern crypto voyage for FTX users to weather the crypto storm”. Tron is waiting on “standby” and has support from crypto exchange Huobi in this mission.
Bankman-Fried also said: “There are a number of players who we are in talks with. We’ll see how that ends up.”
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‘So, what does this mean going forward?’
The FTX CEO asked the question “So, what does this mean going forward?” To which his response was “I’m not sure”.
He was certain, however, that Alameda Research, the quantitative crypto trading firm that he founded, would “wind down trading”.
Regardless, a priority for the FTX CEO is doing right by the customers, and he ended his series of tweets with “I sincerely apologise”.
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