The FTX founder believes he could raise funding to address the trading floor’s financial woes.
The suspension of FTX crypto-exchange founder Sam Bankman-Fried from the crypto-exchange’s management, which was decided by the regulator in the Bahamas, where it is registered, has sparked an off-the-record discussion between him and the site’s current team, with arbitrage manager John Jay Ray III as head.
Opinion by Sam Bankman-Friede reported publication VOX, which reported that the founder of the crypto exchange believes that bankruptcy proceedings will eventually lead to the closure of FTX. He also believes that the crypto exchange has not received enough support from the regulator in the Bahamas. The FTX founder said that if bankruptcy proceedings had not been initiated, he would have been able to resolve customer issues so that they would have been free to withdraw their digital assets in as little as a month.
Sam Bankman-Fried’s incoming statements were responded to unequivocally by the crypto exchange’s current management, noting that he “currently has no role in FTX, FTX US or Alameda Research” and that “he cannot speak on behalf of those entities.”
John Jay Ray III, who was once a bankruptcy trustee at the famed New York energy company Enron, has already sent a 30-page document to a U.S. court in Delaware outlining his view of FTX’s financial situation.
“I’ve worked in business restructuring for over 40 years, I’ve seen situations that involved criminal activity (Enron), I’ve dealt with major stories on the financial soundness of corporations, and I can say one thing: Never in my entire career have I seen such a complete failure of corporate control and an absolute lack of reliable financial information as is seen in this case.”
Thus, there is still no clear understanding of what assets FTX still has and what degree of liquidity they have. On this basis, some recent quantitative assessments of the situation have not yet been confirmed by the bankruptcy trustee, who is still trying to understand the financial condition of this crypto-exchange. So far, the new team has been able to find $560 million in FTX and $740 million in cryptocurrencies.
According to some estimates, the FTX ecosystem consisted of about 130 legal entities, with a total negative net worth of about $8 billion. These companies lent to each other, with significant lending to Alameda.
Consulting firm Nansen released its researchThe document says FTX’s financial difficulties began in June 2022, after well-known crypto-sphere participants such as Three Arrows Capital and Celsius ran into financial trouble.