Sam Bankman-Fried issued a long tweet where he apologizes to users. Read it here.
Highlights:
- FTX International currently has a total market value of assets/collateral higher than client deposits "but that's different from liquidity for delivery--as you can tell from the state of withdrawals. The liquidity varies widely, from very to very little."
- FTX US users are fine
- "I was substantially off on my sense of users' margin."
- There are a number of players who we are in talks with, LOIs, term sheets, etc
- Alameda Research is winding down trading
- In any scenario in which FTX continues operating, its first priority will be radical transparency [nice to say that now]
- What matters right now is trying to do right by customers. That's it.
- At some point I might have more to say about a particular sparring partner, so to speak. But you know, glass houses
Of course, he has said a lot of things that proved to be untrue so I don't know how much you want to bank on this.
This is really concerning, how can you not know that? He also said just this week that FTX didn't invest any client funds, not even in Treasuries. That indicates it should be in cash, so how can there be a liquidity problem?
Again though, if you take him at face value this is really just a liquidity problem and everyone will be made whole except the investors in FTX.
So on net, I suspect the crypto market will take this positively or at least until the next shoe drops. What worries me is that if this was really the state of things, why would Binance walk away so quickly?
The comment about glass houses at Binance is also concerning and could spark a run on them.