FTX Opts for Capital Raise as Alameda Research Winds Down on Trading

<p class="MsoNormal">A troubled cryptocurrency exchange, FTX has opted to raise capital to fill a shortfall as large as $8 billion in its finances. Reuters reports that the exchange will conduct its fundraising next week.</p><p class="MsoNormal">This is even as rival crypto exchange Binance <a href="https://www.financemagnates.com/cryptocurrency/binance-pulls-out-of-ftx-acquisition-crypto-chaos-ensues/?utm_source=FMnewsletter&utm_medium=email&utm_campaign=10.11.22%2F">bailed out</a> of a non-binding agreement to take over the former's non-US operations on Wednesday. The development comes a day after the Founder and CEO, Sam Bankman-Fried told investors during a call that he was hoping <a href="https://www.financemagnates.com/cryptocurrency/ftx-the-rise-the-fall-and-the-reaction/" target="_blank">FTX</a> could raise between $3 billion and $4 billion in equity and debt to cover the shortfall.</p><p class="MsoNormal">In a memo seen by Reuters, Bankman-Fried told staff members that he had a discussion on the matter with Justin Sun, the Founder of the blockchain, Tron and the cryptocurrency token, Tronix. Meanwhile, Sun tweeted early on Thursday that his firm was "putting together a solution" for FTX. The goal is to "initiate a pathway forward" for the exchange, he said.</p><blockquote class="twitter-tweet"><p dir="ltr" lang="en">Further to my announcement to stand behind all Tron token (<a href="https://twitter.com/hashtag/TRX?src=hash&ref_src=twsrc%5Etfw">#TRX</a>, <a href="https://twitter.com/hashtag/BTT?src=hash&ref_src=twsrc%5Etfw">#BTT</a>, <a href="https://twitter.com/hashtag/JST?src=hash&ref_src=twsrc%5Etfw">#JST</a>, <a href="https://twitter.com/hashtag/SUN?src=hash&ref_src=twsrc%5Etfw">#SUN</a>, <a href="https://twitter.com/hashtag/HT?src=hash&ref_src=twsrc%5Etfw">#HT</a>) holders on <a href="https://twitter.com/hashtag/FTX?src=hash&ref_src=twsrc%5Etfw">#FTX</a>, we are putting together a solution together with <a href="https://twitter.com/hashtag/FTX?src=hash&ref_src=twsrc%5Etfw">#FTX</a> to initiate a pathway forward. <a href="https://twitter.com/FTX_Official?ref_src=twsrc%5Etfw">@FTX_Official</a></p>— H.E. Justin Sun???????????????????????? (@justinsuntron) <a href="https://twitter.com/justinsuntron/status/1590539831276634112?ref_src=twsrc%5Etfw">November 10, 2022</a></blockquote><p class="MsoNormal"> In a series of tweets later on Thursday, Bankman-Fried also noted that he and his team were “doing everything we can to raise liquidity”. </p><blockquote class="twitter-tweet"><p dir="ltr" lang="en">10) So, right now, we're spending the week doing everything we can to raise liquidity.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.</p>— SBF (@SBF_FTX) <a href="https://twitter.com/SBF_FTX/status/1590709181077934081?ref_src=twsrc%5Etfw">November 10, 2022</a></blockquote><p class="MsoNormal">Alameda Research </p><p class="MsoNormal">Also, Bankman-Fried in his tweet on Thursday disclosed that FTX’s corporate sibling Alameda Research is gradually drawing its trading activities to a close. The subsidiary, which is based in Hong Kong, is a quantitative cryptocurrency trading firm that provides liquidity to digital assets markets. </p><blockquote class="twitter-tweet"><p dir="ltr" lang="en">15) First, one way or another, Alameda Research is winding down trading.They aren't doing any of the weird things that I see on Twitter--and nothing large at all. And one way or another, soon they won't be trading on FTX anymore.</p>— SBF (@SBF_FTX) <a href="https://twitter.com/SBF_FTX/status/1590709189370081280?ref_src=twsrc%5Etfw">November 10, 2022</a></blockquote><p class="MsoNormal">This is even as a recent review of a private document by CoinDesk showed that Alameda Research's <a href="https://www.financemagnates.com/cryptocurrency/ftx-and-binance-an-epic-drama/" target="_blank">balance sheet</a> is full of FTX tokens (FTT), suggesting stronger ties to FTX. This likely explains why the subsidiary of the Bahamas-based cryptocurrency exchange intends to wind down its trading activities.</p><p class="MsoNormal">As of June 30, Alameda Research’s assets totalled around $14.6 billion with “unlocked FTT tokens” accounting for 25% or $3.66 million, the firm’s single biggest asset. Furthermore, CoinDesk’s review found that 15% or $2.16 billion of Alameda Research’s assets was held in “FTT collateral.” </p><p class="MsoNormal">On the liability side, the outlet found that loans accounted for 92.5% of the trading firm’s $8 billion of liabilities, amounting to $7.4 billion of loans. Again, of the total liability, $292 million was in “locked FTT.”</p> This article was written by Solomon Oladipupo at www.financemagnates.com.

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