FTX Seeks Billion

FTX Seeks $9.4 billion from investors and competitors

Reuters. FILE PHOTO: A representation of bitcoin is seen in front of a stock graph in this illustration taken May 19, 2021. REUTERS/Dado Ruvic/Illustration
Reuters. FILE PHOTO: A representation of bitcoin is seen in front of a stock graph in this illustration taken May 19, 2021. REUTERS/Dado Ruvic/Illustration

By Angus Berwick and Tom Westbrook

(Reuters) – A source said Thursday that FTX is trying hard to get about $9.4 billion from investors and competitors. CEO Sam Bankman-Fried is trying to save the cryptocurrency exchange, which has been hit hard by a rush of customer withdrawals.

The Insider

According to the insider, Bankman-Fried has been in talks with Tron founder Justin Sun, OKC, and Tether, the stablecoin platform, over the past few hours about raising a total of $3 billion.

The remaining sum, the source said, will come from various sources, including FTX’s existing investors like the venture capital firm Sequoia Capital. According to the source, Daniel Loeb’s Third Point is one of the investors in talks with FTX.

Following the breakdown of a potential rescue deal with larger rival Binance, Bankman-Fried took to Twitter and an internal memo seen by Reuters to announce that he was in talks with “a number of players” in the crypto sector, including Sun. He did not want to “imply anything about the odds of success.” he wrote in the memo.

Bankman-Fried added that he was winding down trading at his firm, Alameda Research, which some have speculated contributed to FTX’s issues.

Whether or not Bankman-Fried would be able to secure the necessary funding was unclear.

OKX Contact

OKX told Reuters earlier on Thursday that Bankman-Fried had contacted them earlier in the week and described $7 billion in liabilities that needed to be covered quickly.

“That was too much for us,” OKX’s director of financial markets, Lennix Lai, told Reuters.

We reached out to FTX, Sun, OKX, and Sequoia Third Point for comment on the latest developments in negotiations, but did not hear back from any of them immediately.

The current plight of FTX is a shocking fall for the 30-year-old crypto executive, who was once worth nearly $17 billion but who, in a matter of days, went from being the savior of the industry to needing to be rescued.

Overnight, bitcoin dropped below $16,000 for the first time since late 2020 due to the widespread crisis of confidence in cryptocurrencies caused by the problems at FTX, one of the world’s largest crypto exchanges.

However, cryptocurrency prices were boosted by a general market uptick following stronger-than-expected U.S. inflation data. Midday trading on Friday saw FTX’s native token, FTT, rise nearly 140% to $3.61, but it was still down more than 80% on the week. At its highest, Bitcoin had risen over 10% to $17,563. Without providing any additional details, Tron’s Sun tweeted on Thursday that “we are putting together a solution together with #FTX to initiate a pathway forward,” When asked for comment, Sun remained silent.

The FTX website announced it would no longer be accepting new users or processing withdrawals. Later, however, analytics firm Nansen was cited by Coindesk in an article stating that FTX had resumed withdrawals.

According to Bankman-Fried, FTX.US, the exchange’s operations in the United States, have not suffered any monetary losses.


Sources claim that Bankman-missteps Fried’s after intervening to save other cryptocurrency firms sowed the seeds of FTX’s demise months before.

Reuters reports that after a string of losses, FTX transferred at least $4 billion to Alameda, including some customer deposits.

According to the Wall Street Journal, Bankman-Fried told investors that Alameda owes FTX around $10 billion. The newspaper claimed that of all of FTX’s customer funds, Alameda had received more than half.

According to a person familiar with the probe, the U.S. securities regulator is looking into FTX.com’s practices regarding customer funds and crypto-lending.

However, Reuters was unable to find out what exact actions were being investigated.

After Binance CEO Changpeng “CZ” Zhao tweeted that his company would sell its entire share in FTT, which gives holders discounts on FTX trading fees, and a news report earlier this month raised questions about Alameda’s balance sheet, users rushed to withdraw $6 billion in crypto tokens from FTX within days. Due to the outflow, FTX experienced a severe shortage of cash.


Some backers were canceling their FTX investments. On Wednesday, Sequoia eliminated a $150 million exposure by taking a writedown. FTX also has backing from the Ontario Teachers’ Pension Plan in Canada, as well as from Tiger Global and Softbank (OTC:SFTBY) in Japan.

The latest and possibly largest collapse in an industry that has become a minefield for investors has caused some attention to be focused on the size of customer losses and the impact on sentiment.

Coinshares, a crypto asset manager, recently revealed that it held FTX worth $30,3 million.

Shares of FTX were down sharply on Tuesday and Wednesday, but Robinhood (NASDAQ:HOOD), a discount broker, said it had no direct exposure to the company. However, Bankman-Fried owns a position in FTX.

According to Danny Chong, CEO of decentralized finance firm Tranchess, “A top exchange failing – that’s on a different level,” with potentially wider repercussions than the failure of stablecoin TerraUSD and crypto hedge fund Three Arrows Capital this year.

Bankman-Fried, a California native currently residing in the Bahamas where FTX has its headquarters, promised a “hard look” at the company’s governance. I won’t stick around if I’m not wanted, he said in a series of tweets.

He issued apologies several times in tweets and a memo. “It is my regret. That’s the most crucial aspect, “He made a tweet.

Source: Reuters

Disclaimer: This isn’t financial advice; it’s just for education. Crypted Crypto can’t guarantee its accuracy. Every investment and trade carries some risk, so always do your own research. Invest only what you can afford to lose.




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