FTX CEO calls for $9.4 billion bailout amid liquidity crisis

This came after Binance pulled out of the deal to acquire the crypto-currency exchange amid the ongoing liquidity crisis. During its due diligence, the company discovered that FTX had mismanaged its clients’ funds. Binance said it would not pursue the acquisition deal because the issues were beyond its control or ability to address.

After reporting a $214 million investment in FTX, venture capital firm Sequoia Capital withdrew its commitment after learning that CZ was liquidating $2 billion worth of FTT tokens. Sequoia wrote that a “Liquidity crisis has created a solvency risk for FTX“.

FTX seeks rescue plan to remain solvent

According to a source close with the ongoing transactions with FTX, Bankman-Fried is in talks with some people about the rescue plan. The CEO is seeking $1 billion from crypto-currency exchange OKX, $1 billion from Tether, $1 billion from Tron founder Justin Sun and $2 billion from some investment funds. Could this be the “solution” to which Justin Sun was referring when he said that his team was working with FTX to “initiate a path forward” ? Tron’s top executive announced yesterday that he was colluding with the troubled company to handle the situation. At the time he posted the tweet, Sun did not include any further details about the solution, but SBF retweeted the post, indicating that the two parties were indeed “in the process of implementing a solution.“

In addition to financial contributions from individuals and organizations, FTX is seeking additional funds from other investors to build a comprehensive rescue plan. One such investor is the fund management company Third Point. The source confirmed that SBF has made little progress in its efforts to raise the funds. In any event, the CEO is against filing for bankruptcy or appointing restructuring advisors. The person familiar with the matter added that there is a lot of uncertainty surrounding events, and that discussions are likely to change.

“I was wrong,” admits Sam Bankman-Fried

Sam Bankman-Fried told investors that a bailout is urgently needed to keep FTX solvent. He added that the crypto-currency exchange is facing a funding shortfall of about $8 billion. At this desperate moment, FTX is willing to accept the bailout in the form of debt, equity, or both. The CEO is sober and has acknowledged that he has “f****d up“. He said these exact words to his employees and investors, adding that he would be “incredibly, incredibly grateful“to investors who would help the company.