Every day that goes by, fresh information about FTX’s present and historical circumstances is revealed. The corporation owes more than $3 billion to its top 50 debtors, it was recently revealed. In addition, a court document stated that as of this week’s start, FTX and its affiliates had a combined cash balance of $1.24 billion. Funders like Ripple are trying to help the struggling exchange amidst all of this.
Sam Bankman-Fried, called SBF, the exchange’s founder, apologised to the staff in a recent letter. He stated,
“I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again.”
Can FTX Still Be Saved?
The $51 billion crash in collateral was further reduced in the letter by SBF from $60 billion to $9 billion. Notably, liabilities were $2 billion and collateral had essentially decreased by half to $30 billion due to the spring market meltdown. After that, a “run on the bank,” a further sell-off in virtual currency, and a credit crunch left collateral at $9 billion when FTX filed for bankruptcy on November 11. By that point, the estimated value of the liabilities was $8 billion.
“I did not realize the full extent of the margin position, nor did I realize the magnitude of the risk posed by a hyper-correlated crash.”
The exchange’s creator also disclosed that, around eight minutes after he signed the Chapter 11 paperwork, “possible interest in billions of dollars of capital” arrived. He also asserted skeptically that there was yet a possibility to preserve the business. SBF elaborated on this, saying,
“Maybe there still is a chance to save the company. I believe that there are billions dollars of genuine interest from new investors that could go to customers making whole. But I can’t promise you anything will happen, because it’s not my choice.”
In order to address its liquidity crisis, FTX is on the lookout for suitable funders. On the other hand, regulatory oversight of the exchange is present. But a few days ago, a person “close to the FTX problem” purportedly stated that only Samuel Bankman-inner Fried’s circle was aware of the entire scenario and that none of the company’s employees were informed about it.