FTX CEO Sam Bankman-Fried Tells Investors the Troubled Exchange Needs Cash To Avoid Bankruptcy: Report
The CEO of the cash-strapped FTX crypto exchange is reportedly warning investors that the company will collapse if it fails to get additional capital.
Citing a person familiar with the matter, Bloomberg reports that FTX CEO Sam Bankman-Fried informed investors that his embattled firm may file for bankruptcy if it does not get the money needed to cover an up to $8 billion shortage.
FTX reportedly needs to get at least $4 billion to remain solvent and Bankman-Fried is trying to raise funding in the form of debt, equity or both.
The report says that the 30-year-old executive told investors that he would be “incredibly, unbelievably grateful” if they could help during a call held on Wednesday just before crypto exchange Binance announced that it will not rescue FTX.
The world’s largest digital asset exchange by trading volume earlier signed a non-binding agreement to purchase FTX subject to a review of its finances but eventually decided not to pursue the acquisition.
In a statement, Binance cites several reasons for backing out, including FTX’s financial situation and the fact that the Bahamas-based exchange is facing allegations of misappropriating customers’ funds.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.”
The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are reportedly conducting a probe of FTX and its trading firm Alameda Research.
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