Wikiask:TestScrollSpy

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Main topic: Tech
Other topics: Crypto, FTX
Short answer:
  • FTX is estimated to owe clients $10 billion.
  • FTX admits it does not have the liquidity to pay back clients.
  • They claim to have enough illiquid assets to pay in the future.
  • Bankruptcy is not guaranteed, but likely.

Coindesk article about Alameda caused withdrawal run on FTX[edit]

  • Coindesk reported on 2 November 2022 that Alameda Research, the sister proprietary investment firm also owned by Sam Bankman-Fried, was possibly insolvent. It had $8 billion in liabilities and $15 billion in assets, but most of these assets were the highly volatile FTT, SOL, and other Solana tokens.[1]

FTX is estimated to owe clients $10B[edit]

  • The WSJ reported the FTX lent $10 billion to its sister company Alameda Research, out of a total of $16 billion in customer deposits.[2]
  • The WSJ also reported that FTX needed $8 billion to cover withdrawal requests.[3]
  • Earlier, FTX was looking for $1 billion, according to Semafor.[4]

FTX paused withdrawals on 8 November 2022[edit]

  • On 8 November 2022, around 12 PM GMT, FTX paused withdrawals.[5][6]
  • That was after processing $6 billion in withdrawals over the past 72 hours.[7]

CEO SBF claimed that FTX has assets to pay back clients, but these assets are illiquid[edit]

  • On Twitter, Bankman-Fried claimed that FTX has enough assets to pay back clients, but that they are not all liquid.
  • He also claimed that his priority was raising money to do "right by users".

Binance and Kraken did not want to purchase them[edit]

  • On 8 November 2022, FTX and Binance announced that they signing a non-binding agreement for Binance to purchase FTX.
  • Just one day later, on 9 November 2022, Binance pulled out, citing evidence of "mishandled customer funds and alleged US agency investigations."
  • Kraken was another exchange approached by FTX. They did not reach a deal.[8]

References[edit]

  1. ↑ Allison, Ian (2022-11-02). "Divisions in Sam Bankman-Fried's Crypto Empire Blur on His Trading Titan Alameda's Balance Sheet". www.coindesk.com. Retrieved 2022-11-10.
  2. ↑ Kowsmann, Vicky Ge Huang, Alexander Osipovich and Patricia (2022-11-10). "FTX Tapped Into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall". Wall Street Journal. ISSN 0099-9660. Retrieved 2022-11-10.
  3. ↑ "FTX Needs $8 Billion, Bankman-Fried Tells Investors". WSJ. Retrieved 2022-11-10.
  4. ↑ "Before deal with rival, FTX scoured Wall Street, Silicon Valley billionaires for $1 billion lifeline | Semafor". www.semafor.com. Retrieved 2022-11-10.
  5. ↑ "FTX appears to have stopped processing withdrawals, on-chain data show". The Block. Retrieved 2022-11-10.
  6. ↑ "FTX 'effectively paused' withdrawals, CEO Sam Bankman-Fried tells employees". The Block. Retrieved 2022-11-10.
  7. ↑ "Crypto exchange FTX saw $6 bln in withdrawals in 72 hours". Reuters. 2022-11-08. Retrieved 2022-11-10.
  8. ↑ Shen, Lucinda (2022-11-10). "FTX approaches Kraken amid scramble to find funding". Axios. Retrieved 2022-11-10.
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