FTX’s collateral tanked from $60 billion in the spring to $9 billion now, SBF reportedly told staff. This just about covers its liabilities of $8 billion.

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Sam Bankman Fried

FTX founder Sam Bankman-Fried apologized to exchange staff in a message Tuesday.Photo by Alex Wong/Getty Images

  • FTX founder SBF sent company staff a memo on Tuesday explaining the exchange’s collapse, according to reports.

  • FTX had $60 billion in collateral this spring, but its value fell to $9 billion in November. That’s against a liability of $8 billion.

  • He apologized to the staff and regretted what had happened.

FTX founder Sam Bankman-Fried sent a memo to company staff on Tuesday and recounted what happened before the crypto exchange’s stunning collapse, according to reports.

Bankman-Fried said in a letter that FTX had about $60 billion in collateral and $2 billion in liabilities this spring — but a stock market crash at the time halved the value of the collateral, according to a copy of the document obtained and republished by Bloomberg.

A further “drying up” of credit in the industry caused the collateral’s value to drop further to around $25 billion, while FTX’s liabilities quadrupled to $8 billion.

In November, another “concentrated, hyper-correlated” crash sent the value of the collateral plummeting to $17 billion, according to the message. A “race to the bank” then decimated its value to $9 billion, he said. Bankman-Fried did not provide details on what constituted the guarantee and the liabilities.

FTX filed for bankruptcy on November 11, and Bankman-Fried resigned as CEO the same day. His message to staff on Tuesday was shared by a current FTX employee on the company’s Slack channel, as the former CEO can no longer access the messaging platform, Coindesk reported.

Bankman-Fried apologized to FTX staff in the email, saying he was “deeply sorry” and regretted what happened.

“I didn’t want any of this to happen, and I would give anything to be able to go back and do it again,” Bloomberg reported, citing the letter.

Bankman-Fried did not address issues raised by current CEO John J. Ray, such as security lapses at the exchange, and allegations that he transferred client funds from FTX to his trading company. from crypto Alameda Research, as reported by Reuters on November 11.

The United States Securities and Exchange Commission and the Department of Justice have opened investigations into the collapse of FTX. Bankman-Fried was also reportedly questioned by Bahamian police on November 12.

FTX lawyers said at its first bankruptcy hearing on Tuesday that it could have millions of creditors.

FTX did not immediately respond to Insider’s request for comment which was sent outside of normal business hours.

Read the original article on Business Insider

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