Bankman-Fried himself has decided to write a letter to his former employees. In it, he apologizes for the situation, while pointing out the problems he faced. In doing so, he left many unsaid.
Bankman-Fried “froze in the face of pressure”
The founder and former CEO of the FTX exchange, Sam Bankman-Fried decided to say goodbye to his team in a few words and refer to the recent situation. For this reason, he wrote a letter, which was officially published in the media shortly thereafter. In it, Bankman-Fried indicates his “deep regret over what happened.” Interestingly, in none of the threads raised, did he address the common allegations of embezzlement of company funds. Nor did he mention the cash flow from FTX to Alameda Research.
The body of the letter reads:
“I didn’t want any of this to happen and would give anything to be able to come back and do it all over again. You were my family. (…) I lost that, and our old house is an empty warehouse of monitors. When I turn around, there is no one left to talk to. (…) I froze in the face of pressure and leaks from Binance and said nothing.”
No control over FTX cash flow
The above-quoted letter, Bankman-Fried sent to employees on Tuesday, November 22. This is exactly 11 days after he stepped down as CEO of the exchange.
It further reads:
“I did not realize the full extent of the margin position, nor did I realize the magnitude of the risk posed by the hyper-correlationary crash.”
These words reflect a lack of control over the situation FTX had been in for several months. Well, as recently as this spring, the stock market was in excellent shape. The value of its collateral was $60 billion and its liabilities just $2 billion. However, the progressive collapse of cryptocurrency entities over the summer made the first significant upheaval. Collateral shrank to $25 billion, and liabilities rose to $8 billion. The final collapse was sealed in November. That’s when the value of the platform’s collateral fell another 50%.
SBF still believes in saving FTX
In the final words of the letter, Bankman-Fried shows hope for FTX’s rescue. However, he suggests that this will not be possible with him on board.
In the meantime, however, other interesting information has emerged, which turns out to be confirmation of previously repeated rumors. Behind them is James Bromley of Sullivan & Cromwell, who did a check on FTX’s funds and who says:
“There were significant amounts of money that were spent on things that were not related to the business. For example, one of the debtors is an entity that purchased real estate in the Bahamas to the tune of nearly $300 million.”
Faced with such facts, patching the hole in the stock market’s budget becomes extremely difficult to do.