Crypto exchange CEO: ‘I’m sorry, I should have done better’

Business

NEW YORK, NEW YORK – JUNE 23: Sam Bankman-Fried speaks onstage during the first annual Moonlight Gala benefitting CARE – Children With Special Needs – hosted by Michael Cayre, Roy Nachum and MegaMoon Museum at Casa Cipriani on June 23, 2022 in New York City. (Photo by Craig Barritt/Getty Images for CARE For Special Children )

(NewsNation) —  FTX CEO Sam Bankman-Fried issued an apology to users and investors on Thursday morning after news that rival exchange Binance pulled out of a deal to acquire it.

“I’m sorry. That’s the biggest thing,” Bankman-Fried tweeted. “I f—ed up and should have done better.”

Bankman-Fried’s blunt transparency comes after an anonymous source revealed to Bloomberg on Wednesday that he was practically begging for billions to avoid filing for bankruptcy.

According to the reporting by the business news outlet, Bankman-Fried faced a shortfall of up to $8 billion from withdrawal requests and needed $4 billion to remain solvent.

“He said he would be incredibly, unbelievably grateful if investors could help,” the anonymous source said, according to the Bloomberg report.

In addition to his apology, Bankman-Fried explained — in what was a 22-part Twitter thread — only users overseas will be affected, promising U.S.-based FTX users they will not be financially impacted.

“FTX International currently has a total market value of assets/collateral higher than client deposits. The non-U.S. exchange FTX U.S. users are fine,” Bankman-Fried wrote.

Such an assurance is especially important to FTX’s laundry list of prominent backers, as there have been cases where individuals were unable to retrieve customer assets, Bloomberg reported.

From Sequoia Capital and Tiger Global Management to seven-time Super Bowl champion Tom Brady — who was named brand ambassador back in 2021 after closing an equity deal with the company —  Bankman-Fried claims he’s working overtime to ensure their assets are safe.

“So, right now, we’re spending the week doing everything we can to raise liquidity. There are a number of players who we are in talks with, LOIs, term sheets,” Bankman-Fried tweeted.

“Every penny of that–and of the existing collateral–will go straight to users, unless or until we’ve done right by them,” he continued.

Also, in what would seem like good news to both Bankman-Fried and FTX users, Justin Sun, the founder of the cryptocurrency Tron, tweeted at 10 p.m. on Wednesday that he was “putting together a solution” with Sam Bankman-Fried’s crypto exchange FTX to “initiate a pathway forward.”

But while Bankman-Fried did retweet Sun’s message, it is unclear to what extent the two will work together.

In addition to FTX’s downward spiral, Bankman-Fried announced that Alameda Research, the quantitative trading house closely affiliated with the exchange, was “winding down trading” Thursday.

The news comes amid an investigation by the Securities and Exchange Commission and the Commodity Futures Trading Commission into whether the firm properly handled customer funds.

According to leaked financials published by CoinDesk late last week, much of Alameda’s assets were made up of FTX’s native FTT token. Additionally, they reported Alameda having $14.6 billion of assets against $8 billion of liabilities.

“Even though they are two separate businesses, the division breaks down in a key place: on Alameda’s balance sheet, according to a private financial document reviewed by CoinDesk. (It is conceivable the document represents just part of Alameda,) the report, published Nov. 2, states.

The price of the FTT token fell 80% following the report on Tuesday.

Coinbase Chief Executive Officer Brian Armstrong said Tuesday in a Bloomberg TV interview that losses for FTX is “not a good thing for anybody.” 

NewsNation reached out to FTX for a statement and is still waiting for a reply.

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