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Sam Bankman-Fried (SBF), the CEO and founder of FTX, tweeted earlier today that he is sorry about the failure of FTX and acknowledged that he screwed up and "could have done better." In addition, SBF tweets that his co-founded trading firm, Alameda Research, "is shutting down trading." On the plus side, the issue only concerns FTX International; therefore, FTX US should be alright. In his own words: "It's 100% liquid. All users could completely withdraw. In addition to the exchange's failure, how does it impact Alameda Research, a sister company? That will be briefly covered in this post.
FTX Exchange Logo, Founded by Sam Bankman-Fried (Source: TechCrunch)
A Crypto Empire Filed for Bankrupcy
I find it difficult to imagine that Sam Bankman-Fried, once a crypto pioneer, is now forced to grovel for billions of dollars in order to keep both himself and his users out of bankruptcy. Early in 2022, FTX was valued at $32 billion, according to a CNBC article. However, since that Binance pulled out of the contract yesterday, he is seeking for someone else to support FTX. Sam Bankman-Fried informed investors on Wednesday that FTX was short by at least $8 billion, according to a person familiar with the situation.
The first goal, according to Sam Bankman-tweet Fried's from today, is "doing right by users." Furthermore, he promised that he and his team will make every effort to address the liquidity situation but made no guarantees. He also said that all of the money in the current collateral will go directly to the users. I must admit that I value his openness and user-centered attitude.
Alameda Isn't Exempt
Co-founding Alameda Research, a trading company closely linked to FTX, with Sam Bankman-Fried. It also played a part in the exchange's demise. Nic Carter, a founder member of Castle Island Ventures, reportedly stated:
The exchange and Alameda Research are related in that SBF owns both of them. In other words, there is a considerable rise in the dangers of falling down together. How closely knit are these two sister businesses then? The majority of Alameda's assets are in the FTX native coin FTT, according to financial documents that were hacked and published on CoinDesk on November 2. Accordingly, Alameda has $8 billion in liabilities and $14.6 billion in assets.
Following Binance's formal declaration, the price of FTT has been falling, which has caused users to withdraw money from the exchange and exacerbated the liquidity situation.
Next, what?
According to Bankman-Fried, he is currently discussing the following stages with a few potential candidates. Justin Sun, the creator of the cryptocurrency project Tron Token, tweeted yesterday that he was working with FTX to put together a solution in order to find a way forward. If Sun announces a similar acquisition strategy to what Binance did, I'm interested. It is not yet known if Sun intends to purchase the exchange or not. Now that SBF has some hope, at least.
Final Thoughts
According to a CoinDesk story, FTX US resigns from the Crypto Council for Innovation, a significant trade group for the cryptocurrency industry, even if it is not immediately impacted by this unpleasant crypto drama.
I'm interested to see what FTX's future holds. To be completely honest, who else will accept the offer if the exchange's financial indicators are so poor that even Binance wouldn't? Who else is willing to take over a disaster and has that much money? The future of FTX does not appear promising. But despite the fact that this is ultimately bad news for the whole crypto community, we should all remain optimistic.
Sam Bankman-Fried (SBF), the CEO and founder of FTX, tweeted earlier today that he is sorry about the failure of FTX and acknowledged that he screwed up and "could have done better." In addition, SBF tweets that his co-founded trading firm, Alameda Research, "is shutting down trading." On the plus side, the issue only concerns FTX International; therefore, FTX US should be alright. In his own words: "It's 100% liquid. All users could completely withdraw. In addition to the exchange's failure, how does it impact Alameda Research, a sister company? That will be briefly covered in this post.
FTX Exchange Logo, Founded by Sam Bankman-Fried (Source: TechCrunch)
A Crypto Empire Filed for Bankrupcy
I find it difficult to imagine that Sam Bankman-Fried, once a crypto pioneer, is now forced to grovel for billions of dollars in order to keep both himself and his users out of bankruptcy. Early in 2022, FTX was valued at $32 billion, according to a CNBC article. However, since that Binance pulled out of the contract yesterday, he is seeking for someone else to support FTX. Sam Bankman-Fried informed investors on Wednesday that FTX was short by at least $8 billion, according to a person familiar with the situation.
The first goal, according to Sam Bankman-tweet Fried's from today, is "doing right by users." Furthermore, he promised that he and his team will make every effort to address the liquidity situation but made no guarantees. He also said that all of the money in the current collateral will go directly to the users. I must admit that I value his openness and user-centered attitude.
Alameda Isn't Exempt
Co-founding Alameda Research, a trading company closely linked to FTX, with Sam Bankman-Fried. It also played a part in the exchange's demise. Nic Carter, a founder member of Castle Island Ventures, reportedly stated:
The exchange and Alameda Research are related in that SBF owns both of them. In other words, there is a considerable rise in the dangers of falling down together. How closely knit are these two sister businesses then? The majority of Alameda's assets are in the FTX native coin FTT, according to financial documents that were hacked and published on CoinDesk on November 2. Accordingly, Alameda has $8 billion in liabilities and $14.6 billion in assets.
Following Binance's formal declaration, the price of FTT has been falling, which has caused users to withdraw money from the exchange and exacerbated the liquidity situation.
Next, what?
According to Bankman-Fried, he is currently discussing the following stages with a few potential candidates. Justin Sun, the creator of the cryptocurrency project Tron Token, tweeted yesterday that he was working with FTX to put together a solution in order to find a way forward. If Sun announces a similar acquisition strategy to what Binance did, I'm interested. It is not yet known if Sun intends to purchase the exchange or not. Now that SBF has some hope, at least.
Final Thoughts
According to a CoinDesk story, FTX US resigns from the Crypto Council for Innovation, a significant trade group for the cryptocurrency industry, even if it is not immediately impacted by this unpleasant crypto drama.
I'm interested to see what FTX's future holds. To be completely honest, who else will accept the offer if the exchange's financial indicators are so poor that even Binance wouldn't? Who else is willing to take over a disaster and has that much money? The future of FTX does not appear promising. But despite the fact that this is ultimately bad news for the whole crypto community, we should all remain optimistic.
