Former FTX CEO Sam Bankman-Fried, also known as SBF, has reiterated his apologies to exchange employees in a letter explaining the crash.
According to a Nov. 22 letter reviewed by Cointelegraph, Bankman-Fried explained to employees the reasons for FTX’s liquidity crisis and subsequent bankruptcy. He largely confirmed the information released by the media amid the collapse of the platform, citing the fall in the cryptocurrency market as one of the factors that led to the reduction in the value of FTX’s collateral assets. The November “bank run,” according to the former CEO, helped reduce the stock’s collateral to about $9 billion with $8 billion in liabilities.
“I never wanted this to happen” SBF said. “I did not realize the full extent of the margin position, nor the magnitude of the risk that a hypercorrelated collapse posed.”
Bankman-Fried described its role in the crash as a supervisory failure, saying it should have been “more skeptical of large margin positions” and had more procedures in place to monitor and simulate bank dips and runs. He said that he intended to “compensate” the affected team members, but seemed to regret the events that led to FTX’s bankruptcy:
“I think a month earlier, FTX had been a thriving, profitable, and innovative business. Which means that FTX still had value, and that value could have gone to help make everyone more whole. We probably could have gotten funding important; the potential interest in billions of dollars of funding came about eight minutes after I signed the Chapter 11 papers (the bankruptcy filing).”
“Maybe there is still a chance to save the company,” SBF said. “I think there are billions of dollars of genuine interest from new investors that could go towards winning back customers. But I can’t promise you that nothing will happen, because it’s not my call.”
Bankman-fried resigned as FTX CEO on November 11, in the same announcement that the FTX group filed for bankruptcy in the United States. Bankruptcy court proceedings in the District of Delaware are ongoing, but the legal team representing FTX debtors said on Nov. 22 that the exchange’s assets remained at risk of cyberattacks. An unknown actor withdrew 228,523 Ether (ETH) from FTX on November 11.
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