Posted on November 10, 2022, 7:34 pm
by Angus Berwick and Tom Westbrook
Nov 10 (Reuters) – Cryptocurrency exchange FTX was looking to raise around $ 9.4 billion (€ 9.3 billion) from investors and rivals on Thursday. customers threatening its survival after Binance abandoned the acquisition project.
FTX CEO Sam Bankman-Fried said in a note to employees that he is in discussion with “a number of players” in the cryptocurrency industry, including Justin Sun, the creator of the Tron token.
But he added that he didn’t want to “suggest anything about the chances of success” of his approach and once again said he was “sorry” about the situation the company is in.
He explained that his financial analysis firm, Alameda Research, which is partly at the root of FTX’s difficulties according to several sources, was in the process of closing its operations.
Several sources told Reuters that FTX transferred about $ 4 billion to Alameda from customer deposits to bail it out after a string of heavy losses.
The serious difficulties of FTX, which has become one of the largest cryptocurrency exchanges in the world, have triggered a new crisis of confidence in the “cryptocurrency” sector, causing the Bitcoin price to fall below $ 16,000, the minimum since the end of 2020.
However, bitcoin rallied on Thursday, benefiting from the general resurgence in risk appetite in the markets after better-than-expected US inflation data.
The FTT, the token created by FTX, bounced off its side by more than 130% but still showed a drop of more than 80% from last week’s price.
In a message posted on Twitter, Justin Sun said: “We are building a solution with FTX to find a way out”, without further details. Urged by Reuters, Justin Sun did not respond.
A spokesperson for FTX declined to comment.
According to the Axios news site, FTX has also come close to the Kraken exchange.
US AUTHORITIES INVESTIGATE
A message posted on the FTX website informs visitors that the platform no longer allows withdrawals or account opening.
According to the Wall Street Journal, Sam Bankman-Fried told the company’s shareholders that Alameda Research owed FTX about $ 10 billion; the newspaper adds that FTX has lent Alameda about half of its customers’ deposits.
US financial authorities have opened an investigation into FTX’s handling of customer deposits and its cryptocurrency lending activities, according to a source familiar with the investigation.
FTX clients began to withdraw their holdings en masse last week after a news article surfaced highlighting questions about Alameda’s balance sheet strength.
These withdrawals led Binance CEO Changpeng “CZ” Zhao, one of the most famous figures in the industry, to announce on Twitter that his company would divest all of its FTTs, which amplified the liquidity crisis from FTX.
After announcing its intention to take over FTX, Binance decided Wednesday to abandon its plan, justified by a thorough audit, the publication of new information on the management of customer deposits and the opening of the investigation by the US authorities.
Several FTX shareholders have already written off their holdings significantly or even completely, such as the Sequoia venture capital fund.
Other FTX shareholders include the Canadian Ontario Teachers Pension Plan and the Tiger Global and Softbank investment funds.
(Report Angus Berwick and Anirban Sen in New York, Georgina Lee in Hong Kong, Tom Westbrook in Singapore, Elizabeth Howcroft in London and Hannah Lang in Washington, French version Marc Angrand)