Troubled cryptocurrency exchange FTX has opted to raise capital to fill a shortfall as large as $8 billion in its finances. This is after rival crypto exchange Binance on Wednesday bailed out of a non-binding agreement to take over its non-US operations.
This comes a day after Founder and CEO Sam Bankman-Fried told investors during a call that he was hoping the exchange could raise between $3 billion to $4 billion in equity and debt to cover the shortfall.
In a memo seen by Reuters, Bankman-Fried told staff members that he had a discussion on the matter with Justin Sun, the founder of the blockchain Tron and the cryptocurrency token Tronix. However, the embattled CEO confirmed the news in a series of tweets he made on Thursday.
Bankman-Fried noted that he and his team were “doing everything we can to raise liquidity”.
10) So, right now, we’re spending the week doing everything we can to raise liquidity.
I can’t make any promises about that. But I’m going to try. And give anything I have to if that will make it work.
— SBF (@SBF_FTX) November 10, 2022
Alameda Research
Also, Bankman-Fried in his Thursday tweet disclosed that FTX’s corporate sibling Alameda Research is gradually drawing its trading activities to a close. The subsidiary, which is based in Hong Kong, is a quantitative cryptocurrency trading firm that provides liquidity to digital assets markets.
15) First, one way or another, Alameda Research is winding down trading.
They aren’t doing any of the weird things that I see on Twitter–and nothing large at all. And one way or another, soon they won’t be trading on FTX anymore.
— SBF (@SBF_FTX) November 10, 2022
This is even as a recent review of a private document by CoinDesk showed that the balance of Alameda Research is full of FTX tokens (FTT), suggesting stronger ties to FTX.
This likely explains why the subsidiary of the Bahamas-based cryptocurrency exchange intends to wind down on its trading activities.
As of June 30, Alameda Research’s assets totaled around $14.6 billion with “unlocked FTT tokens” accounting for 25% or $3.66 million, the firm’s single biggest asset. Furthermore, CoinDesk’s review found that 15% or $2.16 billion of Alameda Research’s assets was held in “FTT collateral”.
On the liability side, the outlet found that…
