SBF tells investors FTX needs $8B in emergency funding: WSJ

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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.

The source sug­gests that Bankman-Fried is look­ing to raise $3 bil­lion to $4 bil­lion in equi­ty and that the exchange could raise some debt to cov­er the shortfall. 

Bankman-Fried has also report­ed­ly said he would use his per­son­al wealth to “make cus­tomers and investors whole,” accord­ing to the WSJ source. 

It is also under­stood that dur­ing the call, the FTX CEO laid some of the blame for FTX’s predica­ment on what he says is a cam­paign against the exchange, which has caused a run of investors look­ing to cash out in fear of los­ing their investment. 

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, the FTX web­site post­ed a new ban­ner stat­ing that it is “cur­rent­ly unable to process with­drawals. We strong­ly advise against depositing.” 

Mean­while, a Nov. 9 report from Bloomberg claims that Bankman-Fried told investors that with­out a cash injec­tion, the com­pa­ny would need to file for bank­rupt­cy, cit­ing a “per­son with direct knowl­edge of the matter.”

Bloomberg’s source also appears to con­firm sug­ges­tions that FTX is look­ing to raise res­cue financ­ing in a com­bi­na­tion of debt and equi­ty to save itself from liquidation.

Relat­ed: Binance’s vic­to­ry over FTX means more users mov­ing away from cen­tral exchanges

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.”

Coin­tele­graph has reached out to FTX for con­fir­ma­tion about the short­fall and the con­tents of the investor call but did not receive a response by the time of publication. 



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