Defiant Sam Bankman-Fried declares he has ‘2 weeks to raise $8b’ after FTX bankruptcy
Sam Bankman-Fried (SBF), the former chief executive of the bankrupt cryptocurrency exchange Futures Exchange (FTX), has asserted that FTX is still solvent and plans to raise money even while the formal bankruptcy procedure is underway.
In a Twitter chat with the Vox news reporter on Wednesday, the fallen chief showed defiance, claiming that raising $8 billion to compensate account holders is currently his top priority.
"I have 2 weeks to raise $8 billion; that's basically all that matters for the rest [of] my life." he wrote, responding to a question about his plans.
"A month ago, I was one of the world's greatest fundraisers; now I'm the fallen wreckage of one."
However, it's not certain if the investors would take any interest, and even if he managed to get money, it would probably require support from the bankruptcy court and creditors.
The Wall Street Journal reported on Tuesday that Sam Bankman-Fried has been contacting possible investors in an effort to acquire money to pay back FTX consumers.
The 30-year-old spent the weekend looking for financial commitments that could assist cover some of the $8 billion gap the company is experiencing, according to the Journal.
The fall of FTX and SBF
Last week, the executive resigned as CEO of FTX Group after the company filed for Chapter 11 bankruptcy.
The demise of FTX was brought on by a massive sell-off of FTT, the company's native bitcoin token, by the competing exchange Binance.
Due to a three-day "run" on bitcoin valued at billions of dollars caused by its value falling, FTX experienced a "liquidity crisis" since it lacked the assets necessary to pay out client withdrawals.
SBF, a major supporter of the Democratic Party, is now under criminal investigation in the Bahamas, where the exchange was based, and calls for government inquiries into the highly unregulated cryptocurrency market are resonating around the world.
On November 10th, SBF tweeted, "I'm sorry. That's the biggest thing. I f****d up and should have done better."
How did the skeletons tumble?
The cryptocurrency issued by FTX, FTT, was found to be in abundance on the balance sheet of Alameda Research, a sister company of FTX, according to a report published by CoinDesk on November 2.
The creator of Binance, Changpeng Zhao, announced that all of the cryptocurrency exchange's remaining FTX tokens would be sold off "due to recent revelations that have come to light." FTT prices fell as investors started to leave.
Binance agreed to purchase FTX on November 8 and, the next day, withdrew from the agreement, leading to FTX filing bankruptcy on November 11 and SBF's resignation.
A senior House Republican revealed to The Block that congressional investigators are looking into Binance's role in the abrupt collapse of FTX, an event that has repercussions across the crypto markets.
"This is serious. I think that this is a major event," Rep. Patrick McHenry, R-N.C., told The Block while conceding that one of the topics of a December hearing planned would be Binance's "role" in the unexpected breakdown.
FTX was one of the biggest cryptocurrency exchanges and was valued at about $32 billion in January, and the collapse of its assets have created ripples that have consequences beyond control.