In one of his first public statements since rumors and concerns about FTX’s insolvency flooded the crypto market, CEO Sam Bankman-Fried, or SBF, has said: “I’m sorry.”
In a Nov. 10 Twitter thread, SBF admitted to investors he “should have done better” in providing transparency on the situation with FTX. The CEO reported that the exchange was experiencing a “liquidity crunch” caused by user withdrawals and requested financial assistance from Binance — a potential deal that later fell apart.
According to SBF, the exchange saw roughly $5 billion in withdrawals on Nov. 6. The total market value of FTX International’s assets was higher than its clients’ deposits, but “the liquidity varies widely, from very to very little.”
“The full story here is one I’m still fleshing out every detail of, but as a very high level, I fucked up twice,” said SBF. “The first time, a poor internal labeling of bank-related accounts meant that I was substantially off on my sense of users’ margin. I thought it was way lower.”
The FTX CEO added:
“I should have said more. I’m sorry — I was slammed with things to do and didn’t give updates to you all.”
1) I’m sorry. That’s the biggest thing.
I fucked up, and should have done better.
— SBF (@SBF_FTX) November 10, 2022
While the deal with Binance may be dead, SBF said FTX was discussing similar options with “a number of players” in the crypto space, with “every penny” coming from a potential deal going to the exchange’s affected users. According to the CEO, Alameda Research was also “winding down trading” but United States-based exchange FTX US “was not financially impacted” by recent events.
“At some point I might have more to say about a particular sparring partner, so to speak. But you know, glass houses. So for now, all I’ll say is: well played; you won.”
Some of the events surrounding FTX’s liquidity crisis began in the last seven days, with Binance CEO Changpeng Zhao saying on Nov. 6 the exchange would liquidate its FTX Token (FTT) holdings. Many FTX users attempted to withdraw funds, prompting SBF to tweet on Nov. 7 that the exchange and its assets were “fine,” labeling liquidity concerns as “false rumors.” The FTX CEO put out a seemingly contradictory statement the following day, saying the exchange was facing a “liquidity crunch” and was in talks to sell to Binance.
FTX Ventures and Alameda Research’s websites both went down within 24 hours of SBF’s public statement, Binance said it no longer planned to acquire FTX, and the crypto market experienced extreme volatility with a major exchange potentially going kaput. The FTX website came back online on Nov. 9, but with the main page warning that it “strongly advise[s] against depositing.”