Cryptocurrency exchange FTX is on the verge of collapse and its leader Sam Benkman-Frieds is trying to raise billions of dollars to save his empire after Binance abandoned its plan to buy it because, as the representative of the exchange in Latvia, the problems are so great that it is beyond “Binance” to help.
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“After conducting an in-depth study of the company, as well as taking into account the latest reports of poorly managed client funds and a possible investigation by the US authorities, we have decided that we will not continue with the potential acquisition of FTX.com,” explains the reason for the change of opinion, explains the representative of “Binance” in Latvia, Polina Brotje.
He says Binance initially hoped to be able to support FTX clients to ensure liquidity, but these issues are opportunities to help.
“Whenever one of the biggest players in the industry goes bankrupt, small investors and individuals suffer. In recent years, we have seen the crypto-tech ecosystem become increasingly resilient and we are confident that over time the free market will. it will do away with fringe actors who abuse client funds, Brottier says, adding that as regulatory frameworks are developed and the industry continues to move towards greater decentralization, the overall crypto ecosystem will only grow stronger.
Concerns about “FTX” are easing and, according to “The Financial Times”, venture capital firm “Sequoia Capital” has announced that it will reduce its $ 214 million investment in “FTX” to zero. “In recent days, the liquidity crisis has created a solvency risk for FTX,” Sequoia said in a statement to his fund’s investors.
The sudden change in the fortunes of FTX and its sister trading company Alameda Research marks a dramatic fall for Benkman-Fried, a 30-year-old financier and entrepreneur who is one of the industry’s leading figures. Benkman-Fried was one of the richest men in the world just a few months ago, but much of his $ 24 billion fortune will disappear if FTX and Alameda Research fail.
The collapse would also deal a severe blow to FTX backers, including BlackRock, SoftBank and hedge fund billionaires Paul Tudor Jones and Isiah Englander.
In recent days, Benkman-Fried has appealed to investors to support the stock exchange as clients, fearing for his financial health, demanded their money back. The Financial Times, citing sources, reports that FTX needs $ 8 billion to keep the ship afloat.
The problems may not only come from investors. US media reports that financial supervisors have also begun to take an increased interest in “FTX” and how it used its investors’ money.
In response to the “FTX” misdeeds. cryptocurrencies continues to decrease and “Bitcoin“dropped to 15,000 on Thursday evening.
