Bankman-Fried told investors that its cryptocurrency exchange FTX faced a shortfall of up to $8 billion. The exchange now needs $4 billion to remain solvent. Unfortunately, unless there is an infusion of money from outside, the company will have to declare itself bankrupt.
On November 8, Sam Benkman-Fried and Changpeng Zhao announced a strategic partnership to address the liquidity crisis. This partnership provided for the possible takeover of FTX by Binance.
At the time, Zhao stressed that his company has the right to “reject the deal at any time.”
The fate of not only its investors and creditors depends on the state of affairs on the stock exchange. Everyone who failed to return their assets on time also suffered because the withdrawal procedure was stopped this week. The collapse of crypto companies Celsius and Voyager put billions of customers’ money at risk.
And on November 9, Binance refused to rescue FTX, citing its financial condition and an ongoing investigation. In the end, Zhao expressed his rejection of FTX.com’s help from Sam Bankman-Fried almost as quickly and categorically as he had once offered help.
“We had hoped to be able to support FTX customers to ensure liquidity. But the issues are beyond our control. We couldn’t solve all the problems.” It was announced by representatives of Binance, founded by Zhao Said.
U.S. regulators are taking a keen interest in FTX, investigating whether the firm handled customer funds properly. Regulators are also interested in the firm’s relationship with other parts of Bankman-Fried’s crypto empire, including his trading house Alameda Research.
Thus, Sam Bankman-Fried’s fortune decreased from $15.6 billion to $991.5 million, almost 94%. The failure of the CEO of FTX Trading raised questions about which institutions are safe in a still loosely regulated market.
Currently, Zhao remains the richest person in the field of cryptocurrencies. According to the Bloomberg Billionaires Index, his fortune is estimated at 16.4 billion dollars. But even Zhao is not immune to the drop in cryptocurrency prices. In January, his capital reached $97 billion.
