FTX is exploring every possible avenue to raise about $9.4 billion from its investors and rivals as customers rush to withdraw their funds.
FTX CEO Sam Bankman-Fried is trying desperately trying to acquire funds to save the troubled cryptocurrency exchange FTX as customers rush to withdraw funds. Bankman-Fried has discussed raising $1 billion each from Tron founder Justin Sun and rival exchange OKX as well a stablecoin platform Tether.
The CEO is seeking to raise the remaining funds from current FTX investors such as venture capital fund Sequoia Capital. It is not yet clear whether Bankman-Fried will be able to raise the necessary funds and whether investors will participate.
Binance CEO, Changpeng “CZ” Zhao, announced on it would no longer proceed with its proposed deal to acquire FTX.
Binance stepped in when FTX reached out saying it was undergoing a serious liquidity issue and appeared to have stopped processing withdrawals.
FTX was said to be under severe pressure after growing but unsubstantiated rumors around the balance sheet of its sister firm Alameda Research were purported causing growing concerns that another Terra-like situation may occur. Users rushed to withdraw $6 billion in tokens from FTX within days after CZ announced that Binance would liquidate its entire share in FTT, FTX’s native token, causing a severe liquidity crunch at FTX.
FTX transferred at least $4 billion to Alameda, including come customer deposits. Bankman-Fried revealed to investors that Alameda owes FTX about $10 billion.
FTX had lent more than half of its customer funds to Alameda. FTX has also managed to attract the attention of U.S. securities regulators who are now investigating FTX.com’s handling of customer funds and crypto-lending activities.
