FTX CEO Sam Bankman-Fried (SBF) apologized for the exchange’s current crisis by saying he “fucked up”, and promised that “every penny” his company has will be used to repay users first, and shortly after one of the exchange’s hot wallets resumed withdrawals.
The FTX exchange had paused user withdrawals on Tuesday, and while its website still indicates that it is “currently unable to process withdrawals”, on-chain data shows that an FTX hot wallet — which has remained inactive since 8 November — had resumed activity around 3:50 pm UTC. Andrew Thurman, head of content at crypto data provider Nansen, also confirmed the development on Twitter, noting that more than $7 million have already been withdrawn.
Prior to that, in a Twitter thread on 10 November, SBF admitted to users that at a “very high level, I fucked up twice” during the entire FTX crisis, with the biggest one being his lack of transparency regarding the situation in the last few days. The second mistake SBF claimed to have made was the poor management of his firm, noting that “poor internal labeling of bank-related accounts” resulted in him being “substantially off on my sense of users’ margin.
The CEO also claimed that the total market value of FTX International’s assets were higher than its customer deposits, but the issue came from the lack of liquidity for delivery — implying that the company was not insolvent — with it varying widely between “very to very little”. He noted that FTX’s biggest priority right now was to do right by the users, and raise the liquidity the exchange needed right now. SBF promised users that the funds of FTX.US were “fine”, though he had previously made the same statement regarding FTX before revealing there was a “liquidity crunch”.
FTX originally planned to sell itself to Binance — with the deal being proposed to Changpeng “CZ” Zhao on Tuesday — in exchange for financial assistance, but Binance decided to scrap that plan after completing its due diligence and deciding that the issues were beyond its “ability to help”. SBF now stated that FTX was discussing similar options with a “number of players” in the industry, noting that “every penny” that comes from a potential deal — and FTX’s existing collateral — will go to the exchange’s users first.
SBF also denied rumors that Alameda Research — the sister company of FTX — was attempting to short, and possibly destabilize, the largest stablecoin by market cap Tether (USDT), which earlier today lost its peg to the U.S. dollar by 4% for a time. SBF further announced that “one way or another” Alameda was going to wind down trading.