Sam Bankman-Fried, the former CEO of the now-bankrupt FTX, tried to rally financial support for his beleaguered crypto exchange. This comes as the platform is facing bankruptcy amid an $8 billion black hole in its balance sheets.
FTX collapsed in spectacular fashion over the past week, triggering a contagion that has impacted the broader crypto space. Several projects have now reported having funds stuck in limbo with the exchange.
- Sam Bankman-Fried tried to source funds from investors to bail out his bankrupt crypto exchange, the Wall Street Journal reported on Tuesday (November 15, 2022).
- The report stated that Bankman-Fried and a few remaining employees at the bankrupt exchange attempted to secure a financial commitment from potential investors over the weekend.
- This emergency funding was purportedly to plug an $8 billion hole in the exchange’s balance sheet and pay off affected customers.
- FTX paused withdrawals a week ago after a bank run on the exchange following revelations of financial trouble within the platform. The $8 billion balance sheet hole has been linked with a $10 billion loan given to Alameda Research, FTX’s sister firm.
- With the exchange going into bankruptcy, the emergency funding would have required approval from creditors and court officials. However, the attempt failed.