There’s a scramble to sell assets inside FTX.US, the part of Sam Bankman-Fried’s crypto empire where he insisted on Thursday that “USERS ARE FINE!”
(Bloomberg) — There’s a scramble to sell assets inside FTX.US, the part of Sam Bankman-Fried’s crypto empire where he insisted on Thursday that “USERS ARE FINE!”
Employees of the US-based crypto exchange are in talks about selling parts of the business, including some assets that Bankman-Fried amassed on a sweeping acquisition tear across the industry, according to two people with direct knowledge of the matter, who requested anonymity because the talks were private.
Those employees, in some cases without Bankman-Fried’s participation, are pitching assets including stock-clearing platform Embed and naming rights to an arena in Miami, one of the people said.
A representative for FTX.US declined to comment.
Bankman-Fried’s empire descended into chaos this week after a liquidity crunch at FTX.com, an international crypto exchange affiliated with FTX.US.
The 30-year-old is the chief executive of both firms.
Though FTX.com and FTX.US are separate entities, investors are becoming increasingly anxious over the blurred lines among Bankman-Fried’s business interests.
FTX.US on Thursday said that customers should close out any positions they want to and that trading may be halted in a few days.
In a series of apologetic tweets earlier Thursday that detailed his missteps and failure to understand certain risks, Bankman-Fried said FTX.US “was not financially impacted” by the events of the past few days.
“It’s 100% liquid.
Every user could fully withdraw,” he said in a tweet. “Updates on its future coming.”
With FTX.com facing a shortfall of as much as $8 billion, Bankman-Fried has been attempting to raise rescue financing, claiming to need $4 billion to remain solvent.
A bailout from rival crypto exchange Binance fell apart on Wednesday. Bankman-Fried said on Thursday that Alameda Research, the secretive proprietary trading firm he started before launching FTX, is winding down amid the fallout.
Any asset sales could be complicated by reports that the company might wind up in bankruptcy.
Potential buyers sometimes balk at making deals with companies in deep distress because creditors can ask a judge to void recent sales, arguing they weren’t in the best interest of everyone with money at stake.
While FTX’s unraveling could make for a splashy restructuring case, some bankers are hesitant to get involved until they get a clearer sense of the company’s business dealings, said advisers with experience in crypto reorganizations.
As for Bankman-Fried’s personal net worth: Following FTX.US’s announcement about a potential trading halt, its value was reduced to $1 by the Bloomberg Billionaires Index.
Bankman-Fried owns about 70% of the business, according to the index. It had been valued at $8 billion in a January fundraising round.
A 7.6% stake in Robinhood Markets Inc. was also removed from his wealth calculation, after Reuters reported that it was owned through Alameda and may have been used as collateral for loans.
As a result, Bankman-Fried now has no material assets tracked by the Bloomberg wealth index.
At the start of this week, his fortune was $15.6 billion.
–With assistance from Jeremy Hill, Tom Maloney and Rachel Butt.
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