Together, the FTX exchange and its native token FTT witnessed one of the biggest crashes this year. FTX’s CEO, Sam Bankman-Fried (SBF), stepped forward to explain what went wrong after the lawsuits and regulatory tightening, and to provide insights on future plans. Here are the details…
FTX faces class action lawsuit: Bankman-Fried regrets bankruptcy decision
According to a November 15 document, CEO of FTX exchange SBF was the subject of a class action lawsuit filed by an Oklahoma resident. Plaintiff alleges that Bankman-Fried violated Florida law and caused more than $11 billion in damages to consumers. In addition to the CEO, the class action involved celebrities such as Tom Brady, Stephen Curry, Shaquille O’Neal, Kevin O’Leary, and many more. The lawsuit stated that FTX users held themselves responsible for the damages suffered.
The lawsuit comes days after the cryptocurrency exchange filed for bankruptcy, which SBF says is one of its biggest regrets. In an interview with Vox, the former CEO of FTX said that one of the biggest reasons behind FTX’s decline was the “messy accounting” that emerged during the Terra-LUNA collapse. He also said that leveraged transactions are also affecting business badly. He explained that as FTX, they do not gamble with user funds. However, he stated that they gave it to Alameda as a loan.
“Regulators make everything worse”
According to SBF, after Alameda faced losses in May 2022, FTX sought to bail it out by borrowing money off the exchange’s balance sheet. However, due to complex accounting, FTX failed to realize that Alameda was borrowing much more than the collateral required. He also stated that he intended to raise more funds, but FTX’s bankruptcy filing prevented him from doing so.
Screenshot of SBF talking to VoxThe executive believed that raising more funds would help FTX end its $8 billion liquidity crisis and withdrawals would resume within a month. He added that his only goal from now on is to secure this fund and reunite account holders. Surprisingly, the SBF also noted that all of its disclosures on regulation are mostly for public relations (PR) only. He added that regulators make everything worse and do not protect the consumer at all because they cannot distinguish between good and bad.
FTX CEO says he still has ‘two weeks’
The SBF noted that everyone had told him to file for bankruptcy. But if he hadn’t done that, according to the CEO, things would have improved by 70 percent right now. The SBF stated that he still has 2 weeks to fix things and save the company. He explained that finding $8 billion in two weeks was “the most important goal of his life”. On the other hand, Binance CEO Changpeng Zhao was praised for “because he was the winner”.
FTX Token (FTT) price continues to depreciate
The FTX token (FTT) price dropped 91 percent between November 6 and 9, taking the rest of the market with it. Total market capitalization has dropped 22 percent since November 6. While individual investors accepted their losses, institutions did the same. For example, Temasek, a Singapore government holding company, announced that it will wipe out its $275 million investment in FTX.
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