On November 23, Liz Hoffman, a journalist who covers the financial industry, shared a letter that was reportedly sent by SBF to employees. In that letter, he detailed the extremely precarious state that the group’s collateral and liabilities were in.
.tweet-container,.twitter-tweet.twitter-tweet-rendered,blockquote.twitter-tweet{min-height:261px}.tweet-container{position:relative}blockquote.twitter-tweet{display:flex;max-width:550px;margin-top:10px;margin-bottom:10px}blockquote.twitter-tweet p{font:20px -apple-system,BlinkMacSystemFont,”Segoe UI”,Roboto,Helvetica,Arial,sans-serif}.tweet-container div:first-child{
position:absolute!Important
}.tweet-container div:last-child{
position:relative!Important
}
According to Bankman-Fried, during the spring of this year, FTX had approximately $60 billion in collateral and $2 billion in liabilities. However, a market crash caused the value of the collateral to drop by 50%.
The “drying up” of credit in the cryptocurrency sector drove the value of FTX’s collateral down to $25 billion, which increased its assessed liability to $8 billion. After another drop in November, “the value of collateral fell by another about 50% in a very short period of time,” from an estimated $17 billion.
Bankman-Fried said that another $8 billion in collateral was lost because of the bank run in November, which was caused by what he called “attacks.”
However, SBF shared details that would have altered the outcome to FTX’s advantage. The ex-crypto billionaire has speculated that FTX may still have some worth. According to him, investors were ready to put in billions of dollars before the bankruptcy was filed. He wrote:
“We likely could have raised significant funding; potential interest in billions of dollars in funding came in roughly eight minutes after I signed the Chapter 11 docs.”
He said that the sum of these funds, along with the remaining collateral and interest from other partners, could have restored “large value to customers and saved the business.”
When the FTX cryptocurrency exchange went out of business, it sent shockwaves through the whole industry. Even cryptocurrency investors who didn’t have any money in the exchange itself were affected.
More on SBF and the defunct exchange FTX:
FTX Latest: SBF’s Fallen Crypto Empire Holds $1.24B in Cash Reserves
SBF Blasts Regulators, Says He Regrets Filing For Bankruptcy
See original on DailyCoin
Source: Cryptocurrency - investing.com
