“I F*cked Up”: SBF Scrambles for Rescue of Exchange

“I F*cked Up”: SBF Scrambles for Rescue of Exchange
Image: Christian Dubovan, Unsplash
11 November 2022

Once seen as the crypto space’s lender of last resort, Sam Bankman-Fried is now scrambling to put together a US$9.4 billion rescue package for FTX, while he avoids filing for bankruptcy or appointing restructuring advisors for his troubled crypto exchange.

After failing to sell itself to rival Binance, FTX is trying to raise about US$1 billion from Tron founder Justin Sun, US$1 billion from cryptocurrency exchange OKX, US$1 billion from cryptocurrency firm Tether and US$2 billion from a consortium of investment funds, Reuters reported on Friday, citing a source with direct knowledge of the matter.

The rest of the funds would be provided by investors, which include hedge fund Third Point, the report said. However, this does not include Tether, which said it “does not have any plans to invest or lend money to FTX/Alameda,” WuBlockchain reported.

Related: CZ Naughtily Pulls Out of FTX Deal, Leaves SBF Hanging

In the dark days of the 3AC and Celsius collapses earlier this year, when the crypto space was rife with liquidity concerns, FTX was seen as an emergency lender of sorts, coming to the rescue of several of the industry’s leading borrowing and lending platforms. FTX provided BlockFi with a US$400 million revolving credit facility, and also won a bid to acquire bankrupt crypto lender Voyager for US$1.42 billion (the deal did not close).

Now, BlockFi has become the first direct victim of FTX exposure, halting withdrawals and citing a “lack of clarity” around the situation. But the rest of the industry isn’t spared, and it’s not unlikely that we’ll see more platforms collapse as a result of the fallout.

Offering the slightest degree of relief for users was the announcement that FTX had reached an agreement with Tron to allow holders of TRX, BTT, JST, SUN, and HT to swap assets from FTX 1:1 to external wallets.

Related: BlockFi Halts Withdrawals in FTX Wake But Who Else Has Exposure?

“I fucked up

The US Securities and Exchange Commission, along with the CFTC and DOJ, as well as California and other US local governments, the Bahamas, and the Japanese Financial Services Agency have all said they would be investigating the FTX incident.

SBF published a public apology on his Twitter feed on Thursday, giving a lengthy explanation of the crisis that has unfolded at the company, saying “I fucked up.”

“…poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users’ margin,” the 30-year-old founder said, also apologizing for his lack of communication and saying that his main priority was to make users whole again.

How that will happen is anyone’s guess.

Related: Crypto Twitter on High Alert as it Watches FTX Users Burn

Blockhead Team
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