Sam Bankman-Fried, the CEO of the FTX exchange, has written a letter of apology to the various investors who participated in the funding of the platform to apologise for the lack of communication on his part and the suddenness of the events. Who is affected
Who are the financial backers directly involved in the FTX buyout?
The speed with which the decision to buy FTX from Binance appears to have been made will have been as brutal for the market as it was for investors, and even for the FTX CEO himself. Indeed, Sam Bankman-Fried has apologised to the exchange’s various direct financial backers in a letter sent by email:
I’m sorry I’ve been difficult to contact over the last few days. [I wish I had more details for you now, but I don’t. “
In this brief statement, which clearly shows the suddenness of the events, Sam Bankman-Fried assures us that the protection of customers remains FTX’s priority, and that further details would be announced soon.
Among the investors are the asset management giant BlackRock, the investment funds Sequoia Capital, Paradigm and Tiger Global, and the Japanese holding company SoftBank. For your information, it should also be noted that Binance Labs had made a strategic investment in FTX during 2019.
Valued at more than $32 billion after a $400 million round of financing last February, the world’s second largest cryptocurrency platform announced at the time that it would use the funds raised to carry out mergers and acquisitions and obtain additional licences worldwide.
This latest round of funding included Singaporean public investor Temasek in addition to various ecosystem players.
A sudden event with tragic consequences
And of course, beyond institutional investors, countless everyday investors were hurt by the news and its consequences. Withdrawals were blocked on FTX, all the tokens related to FTX investments fell, especially those of the Solana ecosystem (SOL), and worst of all: a total loss of confidence in the biggest players of our ecosystem.
Indeed, the news is all the more shocking as it concerns one of the world’s largest exchanges, often considered the direct competitor of Binance, which had announced the purchase of falling funds such as Voyager Digital not so long ago in order to save the cryptocurrency market from a bigger fall – and yet.
As a result, the stories are multiplying on Twitter, both from well-known figures in our ecosystem and from unknowns. @Cobie, for example, showed his amazement in a short but eloquent thread:
” […] In my decade of crypto, I think this rug pull is by far the worst ever. Almost no time to react and a lot of well thought out long term cryptocurrencies were hit. When Gox happened, it made sense. Everything was pretty new, when the rumours started it was very plausible. All the exchanges that have rug in the past didn’t feel safe going through a pre-rug. I thought there was probably less than a 1% chance of FTX being insolvent. “
@AlgodTrading, the co-founder of investment fund Capital78, also explained his disgust and surprise:
I had no idea I was potentially going to lose 8 figures in a day without being able to make a withdrawal because of this KYC nonsense. “
Or @CryptoKaleo, the co-founder of LedgArt :
“The last 24 hours have been extremely difficult. I’ve suffered a huge loss, and an exchange I’ve trusted for years is at the centre of one of the biggest banking failures we’ve seen in the crypto industry. I know I am not the only one affected by this situation, and my heart goes out to those in a similar situation. [Last night I was completely in the dark. I wanted to comment on everything that was happening, but I was stuck in my thoughts. “
An episode that will certainly have shocked many people, the finality of which remains far from obvious given the many, many repercussions it could have.
