SBF Commits to ‘Radical Transparency’ as FTX Seeks Investment Capital
Priority is taking care of customers as the falling exchange is in talks with players to gain liquidity
FTX is spending the next week in search of liquidity, the company’s founder said Thursday morning in a Twitter thread pledging “radical transparency” as his company faces dire straits, in need of an infusion of capital.
Sam Bankman-Fried said there are a number of players the exchange is in talks with, adding that there are letters of intent and term sheets.
“We’ll see how that ends up,” he wrote. “Every penny of that — and of the existing collateral — will go straight to users, unless or until we’ve done right by them.”
Binance backed away from its earlier pledge, tweeting Wednesday afternoon that it would not pursue an acquisition of FTX.
Binance’s decision was “a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations,” according to a Binance statement.
Bitcoin dropped below $16,000 yesterday but had rebounded to about $17,600, as of 10:00 a.m. ET Thursday.
The intended deal was not going to include FTX’s US division, and Bankman-Fried noted in his Twitter update Thursday that FTX US is 100% liquid.
Bankman-Fried said he wasn’t able to communicate much during the pending potential deal with Binance, but added Thursday on Twitter that a poor internal labeling of bank-related accounts meant users’ margin was higher than he expected.
Bankman-Fried added in the thread that Alameda Research, a digital asset trading and venture capital investment firm he co-founded, “is winding down trading” and soon won’t be trading on FTX anymore.
He noted, too, that investors, regulators and users would be taking a hard look at FTX governance.
“But all of that isn’t what matters right now,” he said. “What matters right now is trying to do right by customers. That’s it.”
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