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“In the beginning, our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help,” the spokesperson told the news service.
It’s unclear where this may leave FTX, the fourth largest crypto exchange by volume.
“Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books,” he said.
On Monday, FTT witnessed a major sell-off amid concerns about the solvency of FTX and Bankman-Fried’s other trading firm Alameda Research after the push by Binance. Earlier this month, reports came out that Alameda had a large portion of FTT on its balance sheet, possibly helping prop up its value. Alameda has disputed that claim.
FTT prices dropped like a rock amid the controversy, and concerns were further fanned when users reported slow withdrawals on FTX’s platform. Bankman-Fried has since said the company is working to clean out a backlog.
Some of those fears seemed to be relieved Tuesday when Zhao tweeted the news his company would acquire FTX.
“There is a significant liquidity crunch. To protect users, we signed a non-binding LOI, intending to fully acquire http://FTX.com and help cover the liquidity crunch,” he tweeted.
FTX’s collapse is stunning when considering earlier this year it raised $400 million at a $32 billion valuation. According to Crunchbase, FTX has raised nearly $2 billion. Investors in FTX include the SoftBank Vision Fund, Singapore’s Temasek Holdings and Sequoia Capital.
Zhao and Binance also were early investors in FTX.
Forbes has estimated Bankman-Fried’s net worth to be $17 billion.
Illustration: Dom Guzman
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