FTX on Brink of Collapse after Binance Abandons Rescue
Freeman writes:
https://arstechnica.com/tech-policy/2022/11/ftx-on-brink-of-collapse-after-binance-abandons-rescue/
FTX is on the brink of collapse as chief Sam Bankman-Fried races to secure billions of dollars to salvage his empire after Binance ditched an 11th-hour rescue of one of the world's biggest crypto exchanges.
Venture capital firm Sequoia Capital said it would mark down its $214 million investment in FTX to zero after a run on the exchange in recent days blew a massive hole in its balance sheet and cast serious doubts over its survival.
"In recent days, a liquidity crunch has created solvency risk for FTX," Sequoia said in a note on Wednesday to investors in its fund.
The abrupt change in fortune for FTX and its sister trading firm Alameda Research marks a spectacular fall for Bankman-Fried, a 30-year-old trader and entrepreneur who is one of the industry's most prominent figures. Bankman-Fried was one of the world's richest people just months ago, but large swaths of his $24 billion fortune will evaporate if FTX and Alameda Research go bust.
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