FTX Founder Sam Bankman-Fried Attempts To Raise Fresh Cash Despite Bankruptcy

FTX filed for bankruptcy last week, but the cryptocurrency exchange's founder still thinks that he can raise enough money to make users whole, WSJ reported Tuesday, citing people familiar with the matter. From the report: Mr. Bankman-Fried, alongside a few remaining employees, spent the past weekend calling around in search of commitments from investors to plug a shortfall of up to $8 billion in the hopes of repaying FTX's customers, the people said. The efforts to cover that shortfall have so far been unsuccessful. The Wall Street Journal couldn't determine what Mr. Bankman-Fried is offering in return for any potential cash infusion, or whether any investors have committed. FTX filed for bankruptcy protection Friday, and Mr. Bankman-Fried resigned as chief executive of the company. He remains its largest shareholder. The bankruptcy announcement shocked FTX customers who had hoped they could recover assets. Now-deleted tweets from Mr. Bankman-Fried in the days before the filing assured users that the company was "fine." Companies under bankruptcy protection sometimes receive loans meant to help maintain operations. Debtor-in-possession financing means that if companies survive, the first funds they earn will go toward paying down that lifeline. It is less common for a company to try to raise fresh equity capital early on in the bankruptcy process, since debtholders hold priority over any remaining assets.

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