The so-called "Robin Hood of crypto" and FTX CEO Sam Bankman-Fried has had a week of hell.
The event wiped out a whopping 94 percent of Sam Bankman-Fried's roughly $16 billion net worth, a spectacular collapse in wealth of unprecedented proportions.
A glaring question remains: will FTX customers will ever get their money back? That's looking increasingly unlikely, given some damning evidence.
A day before Binance offered to buy FTX, Bankman-Fried tweeted that "FTX has enough to cover all client holdings," only to quietly delete the tweet later, suggesting that the exchange is in serious trouble, as Fortune pointed out.
"Our teams are working on clearing out the withdrawal backlog as is," Bankman-Fried tweeted on Monday, after Binance announced it was offering to take over. "This will clear out liquidity crunches; all assets will be covered 1:1."
But now, to Bankman-Fried's dismay, Binance's offer is off the table.
"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," Binance wrote in a statement, referencing "the latest news reports regarding mishandled customer funds and alleged US agency investigations" for its reason not to pursue the acquisition.
That means Bankman-Fried has an even steeper hill to climb. Whether he has enough liquidity to actually refund users without Binance's help remains as dubious as ever.
But the crypto billionaire is at least feeling regret.
"I fucked up, and should have done better," he wrote in an apologetic Twitter thread today.
Bankman-Fried said he didn't communicate enough and made errors while internally labeling "bank-related accounts," which caused his "sense of users' margin" to be "substantially off."
As for the billions of dollars he owes to FTX users, it's not looking great.
"So, right now, we're spending the week doing everything we can to raise liquidity," the FTX CEO tweeted. "I can't make any promises about that. But I'm going to try. And give anything I have to if that will make it work."
In short, things are shaky as they've ever been. As of Thursday morning, FTX has resumed withdrawals, allowing a number of users to withdraw millions of dollars' worth of crypto for the first time in days, CoinDesk reports.
FTX's spectacular implosion has sent ripples throughout the cryptocurrency industry, with the price of bitcoin falling sharply after the news. It's yet another stark reminder that crypto exchanges are, if history is any judge, astonishingly risky places to store assets.
Crypto investments should be treated with the utmost caution — the next implosion could be right around the corner.
READ MORE: Sam Bankman-Fried quietly deletes his claim that FTX customer funds are safe [Fortune]
Share This Article