As a reminder, the crisis surrounding the trading platform and associated trading platform Alameda has hit the crypto market hard. It all started with a conflict between Bankman-Fried and Changpen Zhao, CEO of cryptocurrency exchange Binance. He had previously announced the possibility of acquiring FTX, but just 24 hours later noted that such a decision could not be realised at the moment. The reason for that is FTX's poor financial performance and the increased scrutiny from regulators like the US Securities and Exchange Commission.

Binance head Changpen Zhao and FTX head Sam Bankman-Fried

It’s also worth noting that it was Changpen who on Sunday publicly announced Binance’s desire to get rid of all FTTs, which act as the platform’s native tokens. Just this decision was the catalyst for the collapse of the rival exchange – it was experiencing serious liquidity problems in the process.

As a result, Sam Bankman-Fried is now trying to find additional capital to potentially fix the problems. According to Reuters, we’re talking about $9.4 billion.

What happened to the FTX crypto exchange

Sam’s main message is that he screwed up, admitting his guilt and the fact that his companies should have acted more transparently. In addition, he is allegedly doing everything he can to minimise the damage from the consequences. Here’s one of his lines, as quoted by Decrypt.

So now we will spend this week doing what we can to attract enough liquidity. I can’t make any promises to you. But I will try and do my best to achieve my targets.

Bankman-Fried’s apology tweet

Bankman-Fried pointed out that the problems concern FTX International exclusively, while the US arm of the exchange, FTX US, operates without problems and freely allows customers to withdraw funds.

FTX International currently has a higher total market value of assets/securities than customer deposits, a value that can change along with asset prices. But this is different from liquidity for delivery – as you can tell from the state of withdrawals. Liquidity varies widely, from very large to very small across different cryptocurrencies.

That said, shortly after these postings, it was reported that representatives from FTX US had announced a pending suspension of trading within the platform. In this regard, some experts suggested that the company may be preparing for bankruptcy.

Last night, news also emerged that FTX had resumed withdrawals, as evidenced by new transactions from the exchange’s blockchain wallet. However, the volumes are limited and small at the moment.

Withdrawal transactions from FTX wallet

In total, Bankman-Fried needs to raise about $9.4 billion to solve its liquidity problem. The FTX executive has been in discussions with Tron founder Justin Sun, OKX management, Tether and a group of other interested investors. Perhaps if Bankman-Fried brings in enough willing investors, the situation will no longer be as critical.

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The information that one of FTX’s ‘saviours’ could be Justin Sun could well be considered a fact by now. At least, this is what he posted on his Twitter.

TRX trading on FTX has resumed. This is just the first step towards a holistic solution being developed to resuscitate and return all FTX user funds to normal.

Tron founder Justin Sun

A statement from the Huobi exchange, where San is executive advisor, promises that owners of TRX, SUN, JST, BTT and HT – which are all tokens linked to San and Huobi – will be able to redeem them on a 1:1 basis, even if FTX withdrawals are shut down.

In other words, no matter how things develop, Tron DAO and Huobi will do all they can to support the exchange of TRON tokens (TRX, BTT, JST, SUN, HT) deposited on the FTX platform on a 1:1 basis, including during the worst-case scenario that we all know could happen.

San’s backing is a curious aspect of the whole Bankman-Fried thing. Recall, Justin San is an eccentric character in his own right. He has been suspected of major financial fraud in the past more than once, but so far, San’s ecosystem projects have remained afloat.

Other cryptocurrency companies don’t need to be “drowned” either – Coinbase CEO Brian Armstrong said. Earlier on Twitter, US Senator Elizabeth Warren called for stricter regulation of cryptocurrencies amid the FTX crisis. Armstrong, on the other hand, tried to change the official’s mind. Here’s his rejoinder.

FTX was an offshore exchange not regulated by the US Securities and Exchange Commission. The problem is that the Commission failed to create regulatory clarity here in the US, so many US investors (and 95 per cent of trading activity) went offshore. Punishing US companies for this makes no sense.

Brian Armstrong’s tweet

However, there is a nuance here – Americans were not allowed to trade on the main FTX platform under the platform’s terms of use. A separate FTX US platform was opened for them. And there are no major problems with it, at least for the time being – withdrawals continue to work as usual, i.e. there is no liquidity crisis. Accordingly, Warren’s call for more aggressive control of crypto precisely because of FTX’s problems has no basis in fact.

Armstrong is right – the US Securities and Exchange Commission has failed over the years to create a coherent set of rules under which the crypto market could live. Businesses have been forced to go offshore, which has made the regulatory problem even more difficult. What happened to FTX in this case is just one facet of the problem.


We believe there is likely to be no chance of FTX being rescued and the exchange resuming normal operations. Although the management of the platform may find money and partially eliminate the problems, many companies have already announced the loss of money and the problems encountered. Blockfi giant was one of them. So there is a possibility here that a domino effect will happen faster than Sam persuades someone to lend him a few billion dollars. And is he trustworthy after what he's done?

What do you think about it? Share your opinion in our millionaire cryptochat. Talk about other important topics there as well.

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