The disgraced founder of FTX, Sam Bankman-Fried, believes there’s enough value locked on the exchange’s balance sheet to repay customer deposits held under custody and rebuild his Dying crypto empire.
The tweet thread suggests that the 30-year-old self-described altruist considers himself the hero who comes up just short. he still FTX hoped that there would be a future post-bankruptcy.
“What can I try to do? Raise liquidity, make customers whole, and restart,” he On Tuesday, I wrote his 1,000,000 followers on Twitter “All I can do is to try. I’ve failed enough for the month, and part of me thinks I might get somewhere.”
First time since FTX and Last Friday, 130 of its affiliated subsidiaries filed for bankruptcy. Bankman-Fried released specifics about the quality and status of its balance sheets.
He claimed ownership of the group still Present value of assets at $9 billion after they were acquired “marked to market”—half of what they were worth a month ago. This is matched by $8 billion in cash obligations.
Are you happy?
This could theoretically be good news. customers This suggests that the hot air from the balance sheet is already in large part deflated. It leaves a stronger foundation for future work. Although their value has declined over the last few weeks, they remain in good standing. still It appears that there is a pool of assets worth $1 billion. can liquidated.
The problem is that by Bankman-Fried’s own account $3.5 billion of the company’s overall assets were illiquid, meaning they could not easily be converted to cash to meet claims. These can Anything from property to exotic, custom-made derivatives contracts that seldom trade and They are hard to price.
That said, it’s not clear how much of what Bankman-Fried posts on social media is ultimately of much meaning. He has resigned as CEO. and his John J. Ray III has taken over management of the company. orderly dissolution of Enron Its stakeholders.
Secondly, Bankman-Fried denied last week that Alameda Research—his crypto Famous hedge fund for exploiting so-called “Kimchi Premium” arbitrage opportunity in the price of Bitcoin—had been engaged in “any of the weird things” he Twitter:
In truth, Alameda was the source of FTX’s bankruptcy, borrowing the latter’s customer funds to finance speculative crypto Bets that went sour. The Wall Street Journal reported Bankman-Fried and Caroline Ellison, Alameda CEO and once romantically involved, has since died. covered this up internally.
His empire collapsed spectacularly last week after Binance withdrew its backing following revelations at the start of this month that Alameda, one of FTX’s major market makers and Was looking for business partners? hiding its insolvency.
Binance founder Changpeng Zhao said he Would sell his entire holdings of FTX’s native token FTT, which he received after he Exiting an investment in the rival exchange. Bankman-Fried estimated that this triggered a flood of customer withdrawals. roughly $5 billion last Sunday alone.
The failure of FTX was compared to both the 2008 bankruptcy at Wall Street investment bank Lehman Brothers and the Ponzi scheme fraud perpetrated by Bernie Madoff.
Bankman-Fried fooled many savvy financial investors, including Temasek, the Singapore sovereign wealth fund. and Sequoia Capital was attested to in September. his “saviour complex” In a flattering profile that has since been taken down. Meanwhile, Bankman-Fried’s own multi-billion dollar wealth has gone up in smoke, and Now, a large part of it consists of his Robinhood: 7%+ stake in trading app
Antigua has intentionally included it. and Barbuda, Bankman-Fried’s offshore crypto exchange is currently seeking protection against creditors under Chapter 11 U.S. Bankruptcy Code.
This allows companies to reorganize their capital structure in order to improve their balance sheets. This involves removing shareholders and finally agreeing with lenders to exchange their debt claims for equity.
This could see a healthier, leaner FTX emerge from bankruptcy, although it is highly unlikely it ever will again enjoy the confidence and support of the market.
Travis Kling, chief investor officer at the crypto Ikigai Asset Management, an hedge fund, has written an excruciating, sometimes expletive-laden slam of Bankman-Fried. his investors’ funds were trapped on the exchange.
“I’m pretty disgusted with the space as a whole and kinda humanity in general,” he wrote.
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