Crypto Billionaire Sam Bankman-Fried Blames Himself For FTX Collapse, Admits He Was ‘F–ed Up’


FTX’s Sam Bankman-Fried tweeted Thursday morning that he is ‘sorry’, admits that he ‘blew it’ and ‘should have done better’. Bankman-Fried also announced that he is phasing out Alameda Research, the trading company he co-founded with FTX.

The post comes as the one-time hero of the crypto sector begs for billions of dollars to avert bankruptcy. It’s been a quick fall out of favor for FTX this week. Earlier this year, the exchange was valued at $32 billion, but now Bankman-Fried is once again looking for someone to stop FTX after rival exchange Binance pulled out of a deal to acquire it.

“I should have communicated more recently as well,” Bankman-Fried wrote. “Obviously my hands were tied for the duration of the potential Binance deal; I wasn’t allowed to say much in public. But of course it’s up to me that we got there in the first place.”

The FTX CEO also provided the latest on how things are going with his beleaguered crypto exchange.

Excluding its U.S. operations, Bankman-Fried said the international operation has a total market value of assets and collateral that exceeds customers’ deposits, but said this is “different from liquidity for delivery — as you can see from the state.” of recordings.”

“The full story here is one that I’m still working out every detail of, but as a very high level, I’ve twisted twice,” Bankman-Fried wrote.

The FTX CEO said his first mistake was poor internal labeling of bank-related accounts, meaning he was “significantly off” in his sense of user margin. “I thought it was much lower.”

He said the stock saw about $5 billion in withdrawals on Sunday, which he called “the largest by a huge margin.”

On Wednesday, Bankman-Fried told investors that the company was facing a deficit 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 #1 priority is “by far” “doing good by users.” To that end, he said, the team is doing everything possible throughout the week to attract liquidity.

“I can’t promise anything about that,” he said. “But I’m going to try.”

“Every cent of that — and of the existing collateral — goes straight to the users unless or until we get it right,” he promised Thursday.

“After that, investors – old and new – and employees who fought for what’s right for their careers, and who weren’t responsible for any of the f-ups.”

Bankman-Fried also said he is in talks with a number of players about next steps.

The company announced Thursday that it had reached an agreement with the Tron network to create a special facility to allow holders of certain tokens to exchange their assets from FTX to external wallets at a value of 1:1.

The exact capacity of that facility is determined weekly.

Alameda Research, the quantitative trading company closely associated with FTX, contributed to the stock market collapse this week.

“They operate an exchange and a props store, which is super unorthodox and just isn’t really allowed in actually regulated capital markets,” said Nic Carter, founder of Castle Island Ventures, of the relationship between the two entities, both owned by Bankman. -Fried.

Leaked financial data published by CoinDesk on Nov. 2 revealed the close 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 in assets against $8 billion in liabilities.

FTT plummeted in value after disclosure, even after Alameda CEO Caroline Ellison said information circulates on the company’s balance sheet regarding “a subset” of its business entities and excluding $10 billion in additional assets.

After sparring with Bankman-Fried on Twitter, Binance CEO Changpeng Zhao announced that his company was putting the FTT on its books, leading to a run on the popular FTX exchange and a liquidity crisis.

The FTT, which peaked at about $78 in September 2021, traded at nearly $25 the day before Zhao’s tweets. It dipped 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 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 release at this time. CNBC contacted Sun, but did not immediately respond to our request for comment.

— Ryan Browne and Kate Rooney of CNBC contributed to this report.

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