<p class=”MsoNormal”>Troubled cryptocurrency exchange FTX has opted to raise capital to fill a shortfall as large as $8 billion in its finances. This is after rival crypto exchange Binance on Wednesday <a href=”https://www.financemagnates.com/cryptocurrency/binance-pulls-out-of-ftx-acquisition-crypto-chaos-ensues/?utm_source=FMnewsletter&utm_medium=email&utm_campaign=10.11.22%2F”>bailed out</a> of a non-binding agreement to take over its non-US operations. </p><p class=”MsoNormal”>This comes a day after Founder and CEO Sam Bankman-Fried told investors during a call that he was hoping the exchange could raise between $3 billion to $4 billion in equity and debt to cover the shortfall.</p><p class=”MsoNormal”>In a memo seen by Reuters, Bankman-Fried told staff members that he had a discussion on the matter with Justin Sun, the founder of the blockchain Tron and the cryptocurrency token Tronix. However, the embattled CEO confirmed the news in a series of tweets he made on Thursday. </p><p class=”MsoNormal”>Bankman-Fried noted that he and his team were “doing everything we can to raise liquidity”. </p><blockquote class=”twitter-tweet”><p dir=”ltr” lang=”en”>10) So, right now, we’re spending the week doing everything we can to raise liquidity.I can’t make any promises about that. But I’m going to try. And give anything I have to if that will make it work.</p>— SBF (@SBF_FTX) <a href=”https://twitter.com/SBF_FTX/status/1590709181077934081?ref_src=twsrc%5Etfw”>November 10, 2022</a></blockquote><p class=”MsoNormal”>Alameda Research </p><p class=”MsoNormal”>Also, Bankman-Fried in his Thursday tweet disclosed that FTX’s corporate sibling Alameda Research is gradually drawing its trading activities to a close. The subsidiary, which is based in Hong Kong, is a quantitative cryptocurrency trading firm that provides liquidity to digital assets markets. </p><blockquote class=”twitter-tweet”><p dir=”ltr” lang=”en”>15) First, one way or another, Alameda Research is winding down trading.They aren’t doing any of the weird things that I see on Twitter–and nothing large at all. And one way or another, soon they won’t be trading on FTX anymore.</p>— SBF (@SBF_FTX) <a href=”https://twitter.com/SBF_FTX/status/1590709189370081280?ref_src=twsrc%5Etfw”>November 10, 2022</a></blockquote><p class=”MsoNormal”>This is even as a recent review of a private document by CoinDesk showed that the balance of Alameda Research is full of FTX tokens (FTT), suggesting stronger ties to FTX. </p><p class=”MsoNormal”>This likely explains why the subsidiary of the Bahamas-based cryptocurrency exchange intends to wind down on its trading activities.</p><p class=”MsoNormal”>As of June 30, Alameda Research’s assets totaled around $14.6 billion with “unlocked FTT tokens” accounting for 25% or $3.66 million, the firm’s single biggest asset. Furthermore, CoinDesk’s review found that 15% or $2.16 billion of Alameda Research’s assets was held in “FTT collateral”. </p><p class=”MsoNormal”>On the liability side, the outlet found that loans accounted for 92.5% of the trading firm’s $8 billion of liabilities, amounting to $7.4 billion of loans. Again, of the total liability, $292 million was in “locked FTT”.</p>
This article was written by Solomon Oladipupo at www.financemagnates.com.
