Sam Bankman-Fried, the CEO of FTX, has broken the silence by talking about the recent acquisition of the company by rival Binance. Apparently, all was not well for FTX in terms of liquidity which made Bankman-Fried seek help from Changpeng Zhao, the CEO of Binance, who was one of the first investors in FTX.
In one of the largest and fastest market crashes of the year, $132 billion has been wiped out of crypto assets. What is more remarkable is that this has happened over the past 12 hours.
According to CoinGecko, the total market cap has slumped from $1.07 trillion 12 hours ago to $870 billion at the time of writing.
Most of the major crypto assets are suffering double-digit losses with the native FTX token leading the pack. FTT has dumped a whopping 75% over the past few hours as liquidity and insolvency concerns grow.
The move was accelerated by the announcement that the exchange will be taken over by rival Binance.
As if the grim global macroeconomic situation wasn’t bad enough for the crypto industry, it now has another contagion to deal with.
Two of the biggest billionaires in the industry have been battling it out, and, as usual, it is the retail investor that suffers.
Bloomberg has reported that Sam Bankman-Fried’s fortunes have been decimated, but it is unlikely he will lose any sleep over it, considering how much he is still worth.
Sam Bankman-Fried has reportedly asked investors for $8 billion in emergency funding to cover a shortfall caused by the flood of withdrawal requests to his crypto exchange in recent days.
According to a report in the Wall Street Journal (WSJ) citing “people familiar with the matter,” the CEO reportedly made the request to investors in a Nov. 9 call where he outlined ways to help solve FTX’s financial woes.
A report from Reuters on Nov. 8 suggests that FTX saw around $6 billion in withdrawals in the 72 hours leading up to Nov.8
He also reportedly stated in the call FTX would be unable to “settle withdrawals as its collateral was dropping in value and couldn’t be liquidated.”
On Nov. 9 which was yesterday, the FTX website posted a new banner stating that it is “currently unable to process withdrawals. We strongly advise against depositing.”
A report also from Bloomberg claims that Bankman-Fried told investors that without a cash injection, the company would need to file for bankruptcy.
On Nov. 8, Binance signed a non-binding letter of intent to buy FTX but pulled out of the deal less than 48 hours later, citing issues that were “beyond our control or ability to help.”.