- FTX CEO Sam Bankman-Fried told investors that the exchange faces a shortfall of up to $8 billion, per Bloomberg.
- FTX needs emergency funding or it will face bankruptcy, Bankman-Fried told investors, per Bloomberg.
- Binance had earlier announced plans to acquire FTX, but bailed on the deal.
Sam Bankman-Fried, the CEO of embattled crypto exchange FTX, told investors that the firm faces bankruptcy if it did not receive emergency funding, Bloomberg reported on Thursday, citing a person with direct knowledge of the matter.
FTX faces a shortfall of up to $8 billion and was trying to raise $4 billion to stay solvent, Bloomberg reported.
“I f—ed up,” Bankman-Fried told investors, the media outlet reported.
Bankman-Fried’s call with investors was held before rival Binance pulled out of a plan to buy FTX. He repeatedly told investors Binance wasn’t giving up on the deal, according to Bloomberg.
Binance called off its acquisition plan on Wednesday, citing issues “beyond our control or ability to help.”
But there may be another twist coming, as Justin Sun, founder of the Tron cryptocurrency network, tweeted late Wednesday that he and his team are “putting together a solution together” with FTX. Bankman-Fried retweeted Sun.
“The ongoing liquidity crunch, despite short term in nature, is harmful to the industry development and investors alike,” Sun added in the Twitter thread. “My team has been working around the clock to avert further deterioration.”
—H.E. Justin Sun?????? (@justinsuntron) November 10, 2022
A bizarre sequence of events precedes Binance’s U-turn on the acquisition, which kicked off over the weekend with a very public Twitter feud between Bankman-Fried and Binance CEO Changpeng “CZ” Zhao. Prior to any acquisition talk, Zhao had tweeted that Binance would be liquidating all its FTT tokens — a crypto token native to FTX — due to “recent revelations.”
He didn’t specify his concerns at the time, but a November 2 CoinDesk report had been stoking market fears about FTX’s liquidity position.
Bankman-Fried then hit back at Zhao on Monday, tweeting: “a competitor is trying to go after us with false rumors,” per media reports including Bloomberg and Reuters.
But the damage had been done and the tiff weighed on market sentiment, sparking a selloff and a rush for withdrawals. Around $6 billion was withdrawn fro FTX in the 72 hours preceding Tuesday morning, Reuters reported, citing a message Bankman-Fried sent to staff.
Bankman-Fried and Zhao then appeared to have made up. The former announced the deal with Binance, and Zhao said Binance “signed a non-binding LOI, intending to fully acquire FTX.com and help cover the liquidity crunch.”
The crypto market has not taken well to the turbulence. Bitcoin and most other cryptocurrencies fell Wednesday following Binance’s announcement that it was walking away from the acquisition of FTX. As of 11.48 p.m. ET, Bitcoin and Ether were both down by around 11% over the last 24 hours, according to CoinMarketCap, extending a crypto slump this year.
FTX did not immediately respond to Insider’s request for comment that was sent outside regular business hours.
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