The CEO of collapsing cryptocurrency exchange FTX, Sam Bankman-Fried, has apologised for failing its users.
While FTX US continues to operate – for now – its international counterpart is facing an $8 billion black hole and has halted withdrawals as it faces a liquidity crisis.
Bankman-Fried took to Twitter to say: “I’m sorry. That’s the biggest thing. I f***** up, and should have done better.”
In a long thread, he claimed that his understanding of the necessary liquidity within FTX was “off”.
He also said that during the quickly agreed and abandoned Binance rescue deal, “my hands were tied… I wasn’t particularly allowed to say much publicly”.
He also confirmed reports that FTX’s trading arm Alameda Research is to wind down trading.
Reports suggest that the exchange, which held $16bn in customer assets, loaned Alameda $10bn to fund trading bets, with the entire sum still owed.
James Powell, CEO and co-founder of fellow exchange Kraken, tweeted that FTX’s woes were the result of “recklessness, greed, self-interest, hubris, and sociopathic behavior”.
Bankman-Fried has sought to establish himself at the centre of discussions over crypto regulation in Washington DC, while he donated millions to politicians during the recent US midterm elections.
He supported the impending Digital Commodities Consumer Protection Act 2022, led by senators Debbie Stabenow and John Boozman. They stated: “The events that have transpired this week reinforce the clear need for greater federal oversight of the digital asset industry.”
Reuters reported that FTX was seeking a $9.4bn bailout package from Justin Sun, OKX and Tether as well as investment funds.
However Tether responded tartly in a tweet: “Tether does not have any plans to invest or lend money to FTX/Alameda. Full stop.”
Chinese entrepreneur Sun is the founder of Tron, a blockchain DAO ecosystem, who tweeted that he is “working on a deal” to rescue FTX. Bankman-Fried retweeted the post.
FTX has announced a Tron credit facility “to allow holders of TRX, BTT, JST, SUN, and HT to swap assets from FTX 1:1 to external wallets”. The legality of this arrangement was called into question by Ki Young Ju, CEO of CryptoQuant.
US authorities The Department of Justice, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are investigating the activities of FTX.
Meanwhile crypto lender BlockFi has halted client withdrawals on its platform in the wake of FTX’s collapse.
“Given the lack of clarity on the status of FTX.com, FTX US and Alameda, we are not able to operate business as usual,” it said in a U-turn from a statement given 24 hours before.