FTX looks for $9.4 billion in rescue funds, Bahamas freezes some assets

According to a source, FTX is frantically trying to raise $9.4 billion from investors and competitors as Chief Executive Sam Bankman-Fried desperately tries to preserve the cryptocurrency exchange that has been battered by a wave of customer withdrawals.

According to the individual with firsthand knowledge of the situation, Bankman-Fried has considered financing $1 billion from Justin Sun, the creator of the cryptocurrency token Tron, a competitor exchange called OKX, and the stablecoin platform Tether.

According to the source, he is looking to raise the remaining monies from other sources, including current FTX backers such venture capital firm Sequoia Capital.

However, it remained unclear whether Bankman-Fried would be able to obtain the necessary money and whether these investors would take part.

Paolo Ardoino, the chief technology officer at Tether, stated on Twitter that the company has "no plans to invest in or lend assets to FTX."

Daniel Loeb's Third Point is one of the 30 to 40 investors in FTX's data room, but a person with knowledge of the situation said that the hedge fund is not considering increasing its investment in FTX.

Requests for comment on the most recent information on the talks from FTX and Sequoia were not immediately answered. The latest update of the talks was not immediately available for comment from OKX. However, earlier on Thursday, OKX informed Reuters that Bankman-Fried had contacted them this week and disclosed liabilities totaling $7 billion that needed to be quickly covered.

Lennix Lai, director of financial markets at OKX, told Reuters, "That was too much for us."

The Bahamas Securities Commission, where the business is domiciled, also took action against FTX by freezing the assets of FTX Digital Markets "and linked parties." A division of FTX with a Bahamas license is FTX Digital Markets Ltd.

The commission added that "the prudent course of action" was to place the unit into "provisional liquidation to protect assets and stabilize the company," adding that "the Commission has proactively dealt with the problem" and "continues to do so."

A request for comment from FTX was not immediately complied with.

In a tweet, FTX said that it had secured an agreement with Tron to provide a unique facility where customers may transfer some cryptocurrency holdings from FTX to outside wallets. Initial asset deployment to support the swaps will be $13 million, according to the statement.

Tron's representative noted that while this was "the initial step for us," the dialogue was still in progress and that the company was "open to talks about additional rescue solutions." Credit lines were "certainly one of the subjects," according to the spokeswoman, but they were not thoroughly discussed.

After a proposed rescue plan with larger rival Binance fell through, Bankman-Fried stated earlier in the day in tweets and a note to staff obtained by Reuters that he was in talks with "a number of stakeholders" in the cryptocurrency industry, including Sun.

He did not want to "imply anything about the odds of achievement," he continued, nevertheless.

In addition, Bankman-Fried announced that his trading company Alameda Research, which some have suggested was partially to blame for FTX's issues, was ceasing trading.

The situation facing FTX is a spectacular fall for the 30-year-old crypto CEO who was previously valued at close to $17 billion but who, in a matter of days, went from being the industry's savior to the one who required saving.

A wider crisis of faith in cryptocurrencies has been sparked by issues at FTX, one of the biggest cryptocurrency exchanges in the world. Overnight, bitcoin fell below $16,000 for the first price since late 2020.