Concerns about customer funds being misappropriated or other recent revelations about the company were not addressed by the former FTX CEO.
In a recent letter sent to staff of the company he once helmed by FTX founder and former CEO Sam Bankman-Fried “froze up in the face of pressure,'” he wrote in a new letter sent to staff of the company he once helmed.
Bankman-Fried said in the letter, which was posted internally in FTX’s company Slack and obtained by CoinDesk, that he was “deeply sorry for what happened” and what it meant to the company’s workers.
FTX diverted customer and corporate funds to fund Bankman-Fried’s Alameda Research, revelations that Alameda was exempt from FTX’s normal liquidation procedure, or allegations that Alameda loaned funds to FTX officials, including himself, he did not address allegations that FTX diverted customer and corporate funds to fund Bankman-Fried’s Alameda Research.
“I didn’t want any of this to happen, and I would give anything to be able to go back and do things over again.
“You were my family,” he said.
“I’ve lost that, and our old home is a decaying warehouse of monitors. There is no one left to talk to when I turn around.
“I froze up in the face of pressure and leaks, and the Binance [letter of intent to purchase FTX] and said nothing,” he said’
Bankman-Fried stepped down as CEO of FTX on Nov. Exactly before his company filed for bankruptcy, he was 11 years old.
According to new CEO John Ray III, who said after Bankman-Fried tweeted multiple threads and talked to a reporter about the company. FTX workers were sent a new employee’s letter on Tuesday, as Bankman-Fried no longer has access to the company Slack.
FTX had $60 billion in collateral and $2 billion in liabilities this spring, according to Bankman-Fried, but the collateral’s value was halved as a result of a market crash.
FTX’s collateral was worth around $25 billion, but his liabilities estimate increased to $8 billion due to the industry’s “drying up” of credit.
As we frantically put everything together, it became apparent that the position was larger than its display on admin/users, because of old fiat deposits before FTX had bank accounts,” he said.
“I didn’t realize the full extent of the margin position, nor the danger posed by a hyper-correlated crash,” he said.
Sam-bankman-Fried “did not grasp the full extent of the margin position” or the danger that a correlated crash posed, he said.
“The advances and secondary sales were fundamentally used to reinvest in the company, including purchasing out Binance, and not for a lot of individual use,'” he said.
Bankman-Fried did not address concerns that customer funds were diverted from FTX to Alameda, which were raised anew during the company’s first bankruptcy hearing earlier Tuesday.
FTX’s status appears to have been transferred to Alameda from other companies within the FTX umbrella, some of which were invested in crypto and technology adventures, according to James Bromley of Sullivan and Cromwell, who introduced FTX’s present status of issues at the bankruptcy hearing in Delaware.
“There were also significant amounts of money that were spent on things that were not connected with the business. For example, one of the U.S. debtors is an element that is operated that bought nearly $300 million worth of land in the Bahamas,” Bromley said. “In light of starter investigations, a large portion of those land buys [were] connected with homes and excursion properties that were utilized by senior executives.”
In any case, the record provides understanding to Bankman-Seared’s reasoning, including his clear conviction that he shouldn’t have petitioned for Part 11 bankruptcy, which he previously told a Vox columnist last week.
FTX declared financial insolvency because of “an outrageous amount of coordinated pressure,” which Bankman-Seared said he agreed to “hesitantly.”
He said in the letter that there is still a chance to save the company.
Billions of dollars of genuine interest from new investors could be used to make customers whole.
I can’t promise you anything because it’s not my choice.
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