FTX CEO Says The Firm May Face Bankruptcy If it Does Not Get Cash Injection
Sam Bankman-Fried, founder and CEO of cryptocurrency exchange FTX, reportedly told investors on Wednesday that it may be forced to declare bankruptcy without fresh capital.
FTX faces an $8 billion shortfall
Bloomberg reported that the FTX exchange faces an $8 billion shortfall following Binance’s earlier refusal to buy the struggling trading empire.
The figure was cited in a Bloomberg report by an unidentified source. Also, the Wall Street Journal cited the same amount, stating that FTX requires cash to cover withdrawals from customers.
The FTX price has plummeted since CoinDesk’s reports of Sam Bankman-Fried’s once-mighty empire having blurred lines.
Read More: The Reason Why Binance Back Off Deal to Buy FTX in Less Than 48 Hours
Binance Withdraw From Buying FTX
Previously, Binance backed out of plans to acquire FTX for an undisclosed amount after announcing its intention to do so.
“Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” said Binance according to Wall Street Journal.
According to Binance CEO Changpeng Zhao, the deal had to wait until due diligence was completed before it could proceed.
Binance CEO Zhao stressed on Wednesday morning that the deal had not been finalized yet in a letter sent to employees.
While he was looking into the matter, he asked Binance employees not to trade FTT, a native utility token that is used to get discounts on FTX trading fees.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of http://FTX.com,” Binance Tweeted.
As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of https://t.co/FQ3MIG381f.
— Binance (@binance) November 9, 2022
Read More: Robinhood Prices Drops 20% Following News of FTX Buyout Became Known
Today, Binance announced that it would not pursue its non-binding letter of intent to acquire FTX.com, citing the severity of the company’s financial troubles.
“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” he added.
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