According to a Reuters report, FTX is exploring all avenues to raise about $9.4 billion from investors and rivals, with customers scrambling to withdraw their funds.
FTX CEO Sam Bankman-Fried is desperate to raise money to save troubled crypto exchange FTX as customers rush to withdraw their funds. Bankman-Fried is reportedly in talks with Tron founder Justin Sun to raise his $1 billion from rival exchange OKX and his platform Tether, respectively. increase. The CEO is looking to raise the rest of the money from his current FTX investors, including venture capital fund Sequoia His Capital, according to sources familiar with the matter. It is not yet clear whether Bankman-Fried will be able to raise the necessary funding and whether investors will participate. Tether’s chief technology officer, Paolo Ardoino, tweeted, “We have no plans to invest or lend assets to FTX.” OKX revealed earlier in the day that he was approached by Bankman-Fried and urgently needed to cover $7 billion in debt.
Binance Withdraws FTX Acquisition
FTX and Bankman-Fried had no choice but to raise the necessary funds to meet customer withdrawals after their bailout deal with Binance failed. Binance CEO Changpeng “CZ” Zhao has announced that he will no longer proceed with the proposed transaction to acquire FTX. CZ announced on Tuesday that Binance has signed a non-binding letter of intent to acquire the troubled exchange. However, he added that the deal is subject to his FTX’s internal data and assessment of its loan commitments.
As a result of the company’s due diligence and recent news reports regarding mishandling of client funds and alleged investigations by U.S. government agencies, we have decided not to pursue the potential acquisition of https://t.co/FQ3MIG381f. Decided.
— Binance (@binance) November 9, 2022
Trouble with FTX
Binance stepped in when contacted that FTX had serious liquidity problems and appeared to have stopped processing withdrawals. FTX was said to be under serious pressure after its growth, but unsubstantiated rumors about sister company Alameda Research’s balance sheet could lead to another Terra-like situation. After CZ announced that Binance would liquidate all shares in FTX’s native token, FTT, users rushed to withdraw $6 billion in tokens from FTX within days to sell FTX caused a severe liquidity crisis. According to sources, FTX transferred at least $4 billion to Alameda, including customer deposits. Bankman-Fried has revealed to investors that Alameda owes about $10 billion to his FTX, according to a Wall Street Journal report. The publication added that FTX lent more than half of its client funds to Alameda. FTX has also managed to attract the attention of US securities regulators who are currently investigating FTX.com’s handling of customer funds and cryptocurrency lending activities.
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