0.9 C
New York
Friday, February 3, 2023

Buy now

Robinhood Saw Its Biggest Crypto Influx in the Past Two Days: CEO

Robinhood Markets Inc has seen its largest crypto influx in the past two days, CEO Vlad Tenev said in a Twitter thread on Thursday.

Robinhood Markets Inc has seen its largest crypto influx in the past two days, Chief Executive Officer Vlad Tenev said in a Twitter thread on Thursday, even as the market was rocked by the saga involving FTX.

FTX seeks $9.4 billion in bailout funds from investors, rivals -source

(Reuters) – FTX is struggling to raise about $9.4 billion from investors and rivals, a source said Thursday, as Chief Executive Sam Bankman-Fried urgently tries to bail out the cryptocurrency exchange that has been ravaged by a torrent of withdrawals from customers.

In the past few hours, Bankman-Fried has talked about raising $1 billion each from Justin Sun, the founder of crypto token Tron, rival exchange OKC and stablecoin platform Tether, according to the source who has direct knowledge of the matter.

He is seeking the rest of other funds, including current investors in FTX such as the venture capital fund Sequoia Capital, the source added. One of the investors in talks with FTX is Daniel Loeb’s hedge fund, Third Point, according to the source.

Bankman-Fried has said in tweets and a memo to employees seen by Reuters that he was in talks with “a number of players” in the crypto sector, including Sun, after a possible bailout deal with bigger rival Binance fell apart. But he added in the memo that he “didn’t want to imply anything about the odds of success”.

Bankman-Fried also said his trading company Alameda Research, which sources said was partly behind FTX’s problems, was winding down trading.

It was not clear whether Bankman-Fried will be able to raise the necessary funds.

Earlier on Thursday, OKX told Reuters it had been approached earlier in the week by Bankman-Fried, who described $7 billion in debt that needed to be covered quickly.

“That was too much for us,” Lennix Lai, director of financial markets at OKX, told Reuters.

FTX, Sun, OKX, Sequoia Third Point did not immediately respond to requests for comment on the latest news of the talks.

FTX’s predicament marks a stunning demise for the 30-year-old crypto executive who was once worth nearly $17 billion, but in a matter of days changed from his status as an industry savior to the one to be rescued.

The troubles at FTX, one of the world’s largest crypto exchanges, have led to a wider crisis of confidence in cryptocurrencies, with bitcoin dropping below $16,000 overnight for the first time since late 2020.

However, a surge in the broader market, following better-than-expected inflation data from the US, also boosted cryptocurrencies. FTX’s native token, FTT, rose nearly 140% to $3.61 in afternoon trading, but fell more than 80% for the week. Bitcoin traded at $17,563, up more than 10.5%. Tron’s Sun said in a tweet on Thursday that “we are putting together a solution with #FTX to initiate a way forward,” without giving further details. Sun did not respond to a request for comment.

A notice on the FTX website said it was no longer processing withdrawals or accepting new users. But Coindesk later quoted analytics firm Nansen to report that FTX had reopened withdrawals.

Bankman-Fried said FTX.US, the exchange’s US operations, were not financially affected.


The seeds of FTX’s demise were sown months earlier, in mistakes made by Bankman-Fried after he intervened to save other crypto firms, sources said.

Sources told Reuters that FTX transferred at least $4 billion to Alameda, including some deposits from customers, to support the trading company after a series of losses.

Bankman-Fried told investors that Alameda owes FTX about $10 billion, the Wall Street Journal reported. FTX had loaned more than half of its client funds to Alameda, the paper said.

According to a source familiar with the investigation, US securities regulator FTX.com is investigating its handling of client funds and crypto lending activities.

Reuters could not figure out what specific activities were the focus of the probe.

Users rushed to withdraw $6 billion worth of crypto tokens from FTX within days after a news story earlier this month raised questions about Alameda’s balance sheet and Binance CEO Changpeng “CZ” Zhao tweeted that his company is holding its entire stake in FTT would sell, giving holders discounts on FTX trading fees. The outflow caused a liquidity crisis at FTX.

contagion risks

Some investors wrote off money plowed into FTX. Sequoia recorded a $150 million exposure to zero on Wednesday. Canada’s Ontario Teachers Pension Plan, Tiger Global and Japan’s Softbank are also FTX investors.

A focus among investors is the unknown magnitude of customer losses and the blow to sentiment from the latest and possibly biggest collapse in an industry that has turned into an investor minefield.

Crypto asset manager Coinshares said it has a total exposure of $30.3 million to FTX.

Broker Robinhood said it has no direct exposure to FTX, but Bankman-Fried has a stake in the company and its shares fell heavily on Tuesday and Wednesday.

“A top exchange failed — that’s on another level,” said Danny Chong, CEO of decentralized financial firm Tranchess, with potentially broader ramifications than the failures of stablecoin TerraUSD and crypto hedge fund Three Arrows Capital this year.

Bankman-Fried, who is from California but lives in the Bahamas, where FTX is based, said the company would take a “hard look” at the board. “I won’t be there if I’m not wanted,” he wrote in a tweet thread.

He also repeatedly apologized in his tweets and memo. “I’m sorry. That’s the most important thing,” he tweeted.

Source link

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected


Latest Articles