Cryptocurrency

FTX reaches out to Kraken for help as it scrambles for $9.4B bailout; Alameda owes exchange $10B

After Binance walked away from the FTX acquisition deal, the cryptocurrency exchange turned to Kraken for a possible bailout. Reuters I quoted two people familiar with the development.

The latest development comes after FTX CEO Sam Bankman-Fried said he was working on an urgent move to raise funds.

Additionally, Tron founder Justin Sun has reportedly emerged as a potential messiah for the beleaguered cryptocurrency exchange since FTX CEO Sam Bankman-Fried called on Sun to intervene. floating.Tron co-founder also revealed he and his team are working on possible solutions

ever since the sun showed interest On FTX, TRON briefly rose 4000% from $0.6 to $2.50 on FTX.

Reuters also report The battered exchange CEO is seeking a rescue package of up to $9.4 billion, along with discussions of $1 billion each from Justin Sun, OKX and Tether, and $2 billion from a group of investment funds.

Alameda got $10 billion in user funds as a loan from FTX

FTX lent billions of dollars to affiliated trading firm Alameda Research to fund risky bets. Wall Street Journal source.

The exchange had $16 billion in customer assets, from which Alameda has borrowed $10 billion and now owes the entire amount to the exchange.

Furthermore, despite the looming troubles, FTX’s CEO insisted that the company and all its assets were fine. Uncertainty arose about the position.

It signed a deal with giant rival Binance on Tuesday, but looking at the books, Binance pulled the deal the next day, saying that FTX’s issues were “out of our control.”

Amid all these controversies, the Department of Justice, the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) are investigating the activities of cryptocurrency exchanges.

broken trust

FTX’s inability to honor withdrawal requests and maintain its position has shocked crypto investors and damaged Bankman-Fried’s reputation in the crypto space.

This prompted many Twitter users to attack the company and its CEO. For example, James Powell, his CEO and co-founder of Kraken, detailed These recent events are the result of some people’s “recklessness, greed, self-interest, arrogance, and social behavior” that jeopardize all of the industry’s hard-earned progress over the past decade. be.

However, FTX’s CEO recently twitter To clarify his position, he said he should have been “communicating” more in the last few days and didn’t have much to do while trading on Binance. said it was trying to secure liquidity and was in talks with “many players.”

according to Nansen dataFTX has resumed withdrawals.

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