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Sam Bankman-Fried apologizes for FTX crisis

Sam Bankman-Fried has apologized for the crisis that has engulfed his financial empire, saying cryptocurrency exchange FTX did not immediately have access to enough funds to meet a wave of $5 billion in customer withdrawals. I acknowledged that

In a series of tweets published Thursday, Bankman-Fried said: that’s the biggest. I was a mess and should have done better.

bankman freed measuring kalpa FTX, one of the world’s largest cryptocurrency exchanges, teeters on the brink of collapse. The 30-year-old executive said Thursday that exchanges have only $400 million of his easily traded U.S. dollar assets to cover Sunday’s record $5 billion surge in redemption claims. .

He believed the exchange was prepared for the crisis, with withdrawals averaging 24 times its available USD liquidity per day.

Bankman-Fried’s admission, whose personal fortune was estimated at $24 billion just a few months ago, raises new questions about whether clients will be complete. He said the value of the group’s assets exceeded customer deposits, but that “liquidity varies widely, from very little to very little.”

“That and every penny of existing collateral goes directly to our users unless or until we do the right thing with them,” he vowed.

Bankman-Fried’s predicament comes as crypto industry publication CoinDesk reported late last week that the bulk of the assets backing its trading firm Alameda Research are in FTT, the coin issued by FTX. It started when

Bankman-Fried’s arch-rival Binance chief Changpeng Zhao said on Sunday that his exchange will liquidate its FTT holdings, sparking both a token sale and a rise in FTX.

Bankman-Fried said Thursday that he plans to scale back trading at Alameda and said he was prepared to step down as leader of FTX.

Binance launched a deal to bail out FTX on Tuesday, but pulled it back a day later, citing concerns about FTX’s business practices and a reported investigation by US regulators.

The U.S. Securities and Exchange Commission is expanding its investigation of FTX, which includes an investigation into the platform’s cryptocurrency lending products and the management of customer funds, according to people familiar with the matter.

Wall Street regulators launched an investigation months ago but sought additional information after the planned acquisition of Binance was announced on Tuesday, the person added. The SEC is also investigating the relationship between FTX and a US entity, FTX US.

Bankman-Fried said Thursday that users of FTX.US, an entity separate from his main international exchange, are “no problem.” A few hours later, the FTX.US website announced that trading on the platform could be suspended in a few days and urged users to close any positions they wished to close. “Withdrawals are and will be open,” he added.

The FTX crisis has also hit high-profile investors.

Venture capital firm Sequoia Capital cuts its $214 million investment in FTX to zero after recent exchange fights left a huge hole in its balance sheet and cast serious doubts on its viability said. “Recently, the liquidity crisis has created solvency risks for FTX,” Sequoia said in a Wednesday memo to the fund’s investors.

Other backers are also facing losses, including SoftBank, Tiger Global, BlackRock and hedge fund managers Paul Tudor Jones and Izzie Englander.

“Too Crazy”: Customer Opinions

The crisis at cryptocurrency exchange FTX has left thousands of customers facing losses, turning their anger on the company’s founder, Sam Bankman-Fried.

Users have been unable to withdraw funds for several days, and the company’s website is now “strongly advised.”[ing]” Users should not deposit money.

Matthias, 21, said he had $1,700 left on the exchange, saying, “It’s just too crazy. FTX had a lot of followers and a reputation. I’m trying to make it look more unstable. [decentralised finance] More or less unusable. ”

“I feel sick,” said Shadan Shoeb, a 21-year-old from India who started trading on FTX in April, and said he had $2,300 left on the exchange. “This is the only one I’ve made in the last six months. . . Trusted [FTX and Bankman-Fried] But all seems lost.

Nicoasgari

Video: Bitcoin Mining: Watts Is Money? | | FT Stands

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