In a new letter released to the public, the founder of the popular failed crypto exchange FTX, Sam Bankman-Fried, has offered an explanation and an inside story into what truly went down with the exchange. He has also sought the forgiveness of his former partners and stated that there is still a way to save the crypto exchange.
Sam Bankman-Fried Gives An Inside Story
In a letter publicly released yesterday, Tuesday, 22 2022, the American entrepreneur, who also doubles as a serial crypto investor and the failed FTX exchange founder, has tried to offer an explanation on what really went down.
The Founder first sought the forgiveness of his former partners and then gave a somewhat detailed chain of events and what really went down, as opposed to information carried by the grapevine.
He claimed that the origin of the problem was the market dip that occurred in the spring, which left the funds greatly loved and a large number of users making large withdrawals.
Sam Bankman-Fried pleaded innocence and maintained that none of what happened was premeditated. According to him, it appears that they were not fully aware of the situation at the time.
Apparently, the crypto exchange was undergoing a major mismanagement of margin and risk control. The management of the exchange at the time did not fully see the potential risk the situation tended to strongly cause.
Bankman stated that the exchange had about $60 billion in assets and $2 billion in liabilities. However, due to the deplorable state of the market, the asset fund crashed to about $25 billion, and the liabilities also went up to about $8 billion.
In addition to that, in November, a new market crash caused the assets fund to drastically reduce by about 50%, leaving it at about $17 billion, and then a subsequent situation that same December finally reduced the amount to about $9 billion.
Bankman concluded that, given the situation, it is clear that the team did not set out to mismanage funds or dupe anyone. He however failed to confirm or deny the allegations of FTX loaning Alameda Research, customer funds or whether those funds were backed by illiquid tokens or not.
FTX Can Still Be Saved Or So He Says
Bankman-Fried also voiced his opinion that it is still highly possible to save the crypto exchange, FTX.
Bankman-Fried, who has since left the FTX exchange and stepped down from his position as CEO of the exchange, has stated that there are loads of new investment prospects to the tune of billions of dollars.
He has, however, made a disclaimer that his statement should not be taken as a promise as he no longer works for FTX.
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