RTThu, 10 Nov 2022 12:53 UTC
FTX is facing a liquidity shortfall of up to $8 billion, according to Bloomberg
The chief executive of cryptocurrency exchange FTX, Sam Bankman-Fried, has told investors that without a cash injection the company would need to file for bankruptcy, Bloomberg reported on Thursday, citing sources.
According to a person with direct knowledge of the matter, Bankman-Fried informed investors during a conference call on Wednesday that his crypto exchange faced
a shortfall of up to $8 billion and needed $4 billion to remain solvent. The unnamed source explained that FTX is attempting to raise rescue financing in the form of debt or equity, or a combination of the two.
"I f***ed up," Bankman-Fried reportedly said, adding he would be "incredibly, unbelievably grateful" if investors could help. The call occurred before crypto exchange Binance abandoned its plans to acquire FTX.
Bloomberg's source noted that Bankman-Fried repeatedly told investors during the call that it was simply not true that Binance's CEO Changpeng Zhao was walking away from the takeover. About an hour later, however, Binance said it was indeed backing out.
"Our hope was to be able to support FTX's customers to provide liquidity, but
the issues are beyond our control or ability to help," Binance said in a statement.
Binance backed out of the deal after a due diligence exam and recent reports of mishandled customer funds, as well as alleged investigations by US authorities into the company. Abandonment of the deal triggered a meltdown in the cryptocurrency market, with the price of Bitcoin sinking to its lowest level in two years.
Comment: Whilst money can and has been made in crypto, as the above story reveals, even as a short term investment it can be extremely risky and, overall, it seems to be a bridge to nowhere that will likely devour otherwise potentially useful resources. It's telling that the multipolar world in particular, but even compromised and controlled Western banking institutions, have been focusing on tangible and traditional assets, such as gold and fuel:
A Bankers dream, fictitious money in a fictitious scenario, all covered in sugar coated candy of course, that is, until the spring of the trap is activated
Writings on the Wall, those who invested are about to get torched, not burnt financially.