SINGAPORE/LONDON, Nov 11 (Reuters) – As regulators scramble to raise billions of dollars to stave off bankruptcy, regulators are embarking on troubled crypto exchange FTX.
A week-long saga that began with trading on FTX, one of the world’s largest cryptocurrency exchanges, and an abandoned takeover deal by arch-rival Binance has led to already struggling bitcoin and other tokens. gave a blow to
FTX is scrambling Sources said the exchange is trying to save itself after the withdrawal of its customers to raise about $9.4 billion from investors and rivals.
Justin Sun, founder of crypto token Tron, said on Bloomberg TV on Friday that he is assessing the situation for FTX. says.
FTX did not respond to requests for comment.
Regulators have intervened, and FTX troubles are on the rise. The Bahamas Securities Commission frozen Assets of FTX Digital Markets, a subsidiary of FTX. FTX Australia called managers on Friday, the Australian Financial Review reported, citing the company’s statement.
Bankman-Fried is under investigation by the U.S. Securities and Exchange Commission for possible securities law violations, Bloomberg reported, citing sources familiar with the matter.
Bankman-Fried did not immediately respond to Reuters’ request for comment.
Reuters has reported that US securities regulators are investigating the handling of FTX.com. Client funds and crypto lending activity.
FTX’s predicament marks a rapid reversal for Bankman-Fried, a 30-year-old cryptocurrency executive who was estimated by Forbes at around $17 billion just two months ago.
The turmoil saw bitcoin reach a two-year low of $15,632 on Wednesday, last trading at 1127 GMT on Friday at $17,338, wiped out by a cross-asset rally after US inflation data.
FTX’s token FTT is down 1.3% to $3.67, facing an 83% weekly loss.
trading volume Bitcoin futures and exchange traded funds exploded.
Kami Zeng, head of research at Forelite Capital Management, a Hong Kong-based crypto fund manager, said, “Confidence was lost in the first day of this impact, and there are still no signs of it returning. No,’ he said.
“We have already witnessed regulatory action from the US to Japan to the Bahamas and more. People are hurting and need protection.”
Unlike mainstream companies and financial services companies, cryptocurrency entities operate in a regulatory gray zone. For example, deposits with cryptocurrency lenders are not guaranteed by the government.
we member of parliament There are growing calls for action, including new laws to govern the sector and an investigation into the causes of the FTX crisis.
Banking on support
Sources close to SoftBank Group in Japan (9984.T) On Friday, the technology investor’s Vision Fund investment in the U.S. and international operations of cryptocurrency exchange FTX said less than $100 million and would be slashed to zero.
According to this source, backing FTX is a problem for FTX’s big investors.
Another venture capital fund, Sequoia Capital, Zero $150M exposure to FTXit said Wednesday.
Other crypto companies are taking steps to protect themselves. Crypto lender BlockFi said it would suspend customer withdrawals until FTX has clarification.
broker Genesis Trading has revealed that its derivatives business has approximately $175 million in locked funds on FTX.
Matthew Dibb, Chief Operating Officer of Stack Fund, a Singapore-based cryptocurrency investment manager, said, “We believe the chances of FTX being rescued are 20-30% at best.
“It looks like the damage has been done.Even if FTX is bailed out, it is no longer the way to trade because they have lost all trust.The FTX bailout is not for the company, it is for the clients and the crypto eco.” It’s for the system,” Dibb said.
The seeds of trouble in FTX sown a few months agoafter Bankman-Fried stepped in to save other crypto companies hit by market turmoil.
For example, FTX in July agreed to offer BlockFi to cryptocurrency lenders. $400 million revolving credit facility And then there was the option to buy lenders who faced a surge in withdrawals.
Reuters reported this week, citing multiple sources. FTX Remittance Alameda At Least $4 Billion To Support Crypto Trading Firms After Series Of Losses.
Bankman-Fried is in talks to raise $1 billion from each. Tron Founder Sun, rival exchange OKX and stablecoin platform Tether, Reuters reported on Thursday, citing sources with direct knowledge of the matter.
Bankman-Fried is seeking the remainder from other funds, including current investors, the sources said.
Sun told Bloomberg TV on Friday that the company “needs to do full due diligence and assess the situation to get a fuller picture of just how serious the FTX liquidity crisis is.” As soon as I can, I think I’ll start.”
Sun said it didn’t know the exact amount it would need to bail out FTX, but it was in the billions, and at reported levels there was “something on the table.”
Haider Rafique, OKX Global Chief Marketing Officer, said:
Additional reporting by Rae Wee from Singapore, Hannah Lang from New York, David Shepardson from Washington, Aishwarya Nair from Bangalore, Georgina Lee from Hong Kong and Alun John from London.Edited by Sam Holmes and Jane Merriman
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