FTX’s Sam Bankman-Fried apologises to staff, says collateral plummeted by US$51 billion in crypto crash
- The founder of FTX and Alameda Research outlined in a letter the company’s financial troubles that he said started with the slide of digital assets this year
- After a sell-off in virtual coins and a ‘run on the bank’, FTX’s collateral was left at US$9 billion, down from US$60 billion, he said
Sam Bankman-Fried, disgraced founder of the now collapsed crypto exchange FTX and trading house Alameda Research, apologised to staff in a letter that outlined a crash in “collateral” to US$9 billion from US$60 billion.
“I didn’t mean for any of this to happen, and I would give anything to be able to go back and do things over again,” he wrote in the message sent to employees on Tuesday and obtained by Bloomberg News.
A slide in digital-asset markets in spring roughly halved collateral to US$30 billion, while liabilities were US$2 billion, he said.
A combination of a credit squeeze, a further sell-off in virtual coins and a “run on the bank” left collateral at US$9 billion ahead of FTX’s November 11 bankruptcy, he wrote. The estimate for liabilities had reached US$8 billion by then, he said.
“I did not realise the full extent of the margin position, nor did I realise the magnitude of the risk posed by a hyper-correlated crash,” Bankman-Fried said. He didn’t give exact details on the make-up of the collateral or the liabilities.