• February 27, 2024

Satoshihodler.com

All the latest cryptocurrency news

Sam Bankman-Fried Admits FTX Rescue in Letter to Former Employees

Reading time: < 1 minute

Former FTX CEO Sam Bankman-Fried explained in a letter to its employees the reasons for the collapse and did not rule out the possibility of restoring the platform’s activities.

According to Bankman-Fried, FTX’s troubles started with a market crash in the spring, followed by deleveraging and massive client withdrawals. The poor quality of margin management and risk control led to bankruptcy filing.

He wrote:

“I had no idea that it was possible. I did not fully understand the nature of the margin position and the risk taken associated with a highly correlated crash. Loans and secondary sales were generally used to reinvest in the business, including buying back stakes from Binance, and not to finance personal needs on a large scale.”