FTX’s Sam Bankman-Fried tweeted on Thursday morning that he is “sorry,” admitting that he “f—ed up” and “should have done better.” Bankman-Fried also announced that he is winding down Alameda Research, the trading firm he co-founded alongside FTX.
The post comes as the onetime hero of the crypto sector begs for billions of dollars to stave off bankruptcy. It’s been a swift fall from grace for FTX this week.
Earlier this year, the exchange was valued at $32 billion, but now Bankman-Fried is again looking for someone to backstop FTX after rival exchange Binance pulled out of a deal to acquire it.
“I also should have been communicating more very recently,” wrote Bankman-Fried. “Transparently–my hands were tied during the duration of the possible Binance deal; I wasn’t particularly allowed to say much publicly. But of course it’s on me that we ended up there in the first place.”
The FTX CEO also provided the latest on where things stand with his beleaguered crypto exchange.
Excluding its U.S. business, Bankman-Fried said the international operation has a total market value of assets and collateral that is higher than client deposits, but he said that is “different from liquidity for delivery–as you can tell from the state of withdrawals.”
“The full story here is one I’m still fleshing out every detail of, but as a very high level, I f—ed up twice,” wrote Bankman-Fried.
The FTX CEO said his first mistake was poor internal labeling of bank-related accounts, which meant that he was “substantially off” on his sense of users’ margin. “I thought it was way lower.”
He said that on Sunday the exchange saw roughly $5 billion of withdrawals, which he called “the largest by a huge margin.”
By Wednesday, Bankman-Fried told investors that the company was facing a shortfall of at least $8 billion and needed emergency funding, according to a person familiar with the matter.
In Thursday’s tweet thread, Bankman-Fried said his No. 1 priority “by far” is “doing right by users.” To that end, he said, the team is spending the week doing everything it can to raise liquidity.
“I can’t make any promises about that,” he said. “But I’m going to try.”
“Every penny of that–and of the existing collateral–will go straight to users, unless or until we’ve done right by them,” he pledged Thursday.
“After that, investors–old and new–and employees who have fought for what’s right for their career, and who weren’t responsible for any of the f— ups.”
Bankman-Fried also said he’s in talks with a number of players about next steps.
The company announced on Thursday that it had reached an agreement with the Tron network to create a special facility to allow holders of certain tokens to swap their assets from FTX to external wallets at a 1:1 value.
The exact capacity of that facility will be determined on a weekly basis.
Alameda Research, the quantitative trading firm closely affiliated with FTX, contributed to the exchange’s collapse this week.
“They operate an exchange and a prop shop, which is super unorthodox, and just not really allowed in actually regulated capital markets,” said Nic Carter, founding partner of Castle Island Ventures, of the relationship between the two entities, both owned by Bankman-Fried.
Leaked financials published by CoinDesk on Nov. 2 revealed the tight relationship between the two entities. The report showed that most of Alameda’s assets were reportedly in FTT, FTX’s native token, and that Alameda had $14.6 billion of assets against $8 billion of liabilities.
FTT plunged in value following the revelation, even after Alameda CEO Caroline Ellison said information circulating on the firm’s balance sheet related to “a subset” of its corporate entities and excluded $10 billion of additional assets.
After sparring with Bankman-Fried on Twitter, Binance CEO Changpeng Zhao announced his company was offloading the FTT on its books, leading to a run on the popular FTX exchange and a liquidity crisis.
FTT, which peaked at around $78 in September 2021, was trading at close to $25 the day before Zhao’s tweets. It plunged below $16 on Monday and then fell off a cliff after the deal was announced Tuesday. The token is currently trading at around $3.80.
“The fact that FTT is such a big part of their collateral that they use in order to get loans on other platforms, those are all really questionable things,” Carter said.
FTX said in an email to CNBC that the posts on Twitter are the only official statements FTX will be issuing at this time. CNBC reached out to Sun but did not immediately hear back on our request for comment CNBC report.
- JUST IN: Buhari Off To Guinea-Bissau
- “What Happened To Kunle Remi?” – Fans React As Popular Actress Bimbo Ademoye Reportedly Engaged To VJ Adams
- BREAKING: Spain-Born Hakimi Sends Morocco To World Cup Quarter-Finals
- 2023: ‘Vote APC Or We Deal With You’ –Powerful Lawmaker Threatens Constituents
- Court Remands Suspected Cultist For Attempting To Kill Policemen In Osun
Entertainment4 days ago
19 Youths To Receive Award At 7th Osun Youth Ambassador Award On Sunday
News3 days ago
How Wall Gecko Allegedly Wipes Out Family Of Six In Ogun
News4 days ago
Appeal Court Affirms Oyetola As APC Candidates In July 16 Guber Polls
News4 days ago
Police Arrest Four Secondary School Students Over Classroom Romance