Sources: Sam Bankman-Fried has unsuccessfully continued to attempt to raise $8B to plug FTX's shortfall, despite filing for bankruptcy and resigning as CEO

Alongside a few remaining employees, Mr. Bankman-Fried spent the weekend calling around in search of new commitments from investors

Wall Street Journal 2022-11-15

Context & Ripple Effects

FTX had been pursuing a $1B funding round that had not closed before Bankman-Fried told investors the company faced an $8B cash shortfall and needed an injection to avoid bankruptcy. The post-bankruptcy outreach turns that earlier financing effort into an attempted rescue.

The subsequent reporting on FTX and Alameda's overlapping asset accounting gives prospective backers a concrete reason to question whether a founder-led capital raise can resolve the underlying gap.

First-order effects

FTX remains without the new commitments Bankman-Fried sought, leaving its shortfall unfilled after the company entered bankruptcy and he resigned as CEO.
Bankman-Fried's remaining employees are spending time on fundraising outreach even as the company no longer has him in the chief executive role.

Second-order effects

Potential FTX backers, including the firms approached in the related coverage, must assess a rescue against reports that internal accounting obscured transfers between FTX and Alameda.
The failed rescue effort shifts attention from a new equity-style financing round toward the bankruptcy process as the venue for resolving FTX's obligations.

Third-order effects

If accounting opacity is central to the gap, distressed crypto-platform financing will increasingly depend on whether investors can verify asset ownership and separation between affiliated entities.
FTX's sequence—from an unclosed growth round to an emergency shortfall—points to solvency risk becoming visible only when routine fundraising no longer closes.

The trend: FTX illustrates how a stalled private funding round can rapidly become a bankruptcy-era rescue search when a platform's reported assets and obligations lose credibility.

Discussion

@nickrmanes Nick Manes on x
“The Wall Street Journal couldn't determine what Mr. Bankman-Fried is offering in return for any potential cash infusion.” https://www.wsj.com/...
@thormaximalist @thormaximalist on x
Who would give more money to @SBF_FTX and why? https://www.wsj.com/...
@davecbenoit Dave Benoit on x
SBF is searching for a whole new planet in the wild fundraising universe. https://www.wsj.com/...
@laurashin Laura Shin on x
🤯 FTX Founder Sam Bankman-Fried Attempts to Raise Fresh Cash Despite Bankruptcy - WSJ https://www.wsj.com/...
@lawmaster @lawmaster on x
@Tree_of_Alpha Just heard this morning that he's trying from Asian mega funds but thought it was bullshit. Just really struggle to understand why anyone would donate money to FTX
@tree_of_alpha @tree_of_alpha on x
FTX FOUNDER SAM BANKMAN-FRIED ATTEMPTS TO RAISE FRESH CASH DESPITE BANKRUPTCY - WSJ ????????????
@eliotwb Eliot Brown on x
Despite being in bankruptcy and SBF having resigned as CEO, SBF is ... trying to raise billions of dollars for FTX @ceostroff @Vlajournaliste @berber_jin1 https://www.wsj.com/...
@ivanthek @ivanthek on x
Try a SPAC. I hear SPACs are hot. https://twitter.com/...
@mhonkasalo @mhonkasalo on x
Surprised he had time to beg for money when most of his time was spent sucking at LoL. https://twitter.com/...
@jcoviedo6 JC Oviedo on x
Fucking sociopath https://twitter.com/...
@axelmerk Axel Merk on x
My billionaire followers, would you have $8bn to spare? If so, 👇 https://www.wsj.com/...
@stockballa @stockballa on x
https://twitter.com/... https://twitter.com/...
@ethanctrades Ethan Caviness on x
How does he plan to raise cash to repay customers in this macro? https://twitter.com/...
@adamscochran Adam Cochran on x
Imagine thinking “this is a good investment” after they flat out stoke money, violated their ToS, and lied about it... https://twitter.com/...
@thetieio @thetieio on x
We've archived @SBF_FTX's tweets over the past year. Due to the recent bankruptcy, and growing concern around his account activity, we've decided to release the list of 118 tracked tweets that have since been deleted after posting. https://docs.google.com/...
@wassielawyer @wassielawyer on x
For anyone that is interested in how the whole thing got structurally fucked, an interesting observation is that FTX Ventures, Alameda Research and FTX Intl are all structurally separate but funds moved via interco loans between FTX Intl and Alameda, and Alameda and FTX Ventures.…
@wassielawyer @wassielawyer on x
1/ So here is an explanation of the structural clusterfuck in understandable English. FTX Trading Ltd (aka FTX Intl), Alameda Research and FTX Ventures were separate structures. They should not have a commingled balance sheet, and a failure of one should not affect the others. ht…
@adamsamson Adam Samson on x
Full story here -> Global investigators pounce as FTX collapse leaves potentially 1mn creditors https://www.ft.com/... https://twitter.com/...
@fintechfrank Frank Chaparro on x
Scoop: FTX to reorganize, new CEO seeks support from staff during company conference call https://www.theblock.co/...
@kadhim @kadhim on x
First substantive filing in the FTX bankruptcy: https://pacer-documents.s3.amazonaws.co m/ ... - Confirms DOJ, SEC, CFTC and dozens of other investigations - SBF stood aside at 4:30am ET Friday ("after consultation with his own legal counsel") - Sullivan & Cromwell set to earn $$…
@peter_tl Peter Thal Larsen on x
The FTX bankruptcy lawyers discovered a missing zero https://twitter.com/...
@kadhim @kadhim on x
- by Friday we'll have the top 50 creditors across the consolidated group - New CEO John Ray looking to “reorganize or sell FTX's complex array of businesses, investments and property” https://pacer-documents.s3.amazonaws.co m/ ...
@lananhtnguyen Lananh Nguyen on x
*FTX also responded to a cyberattack that occurred on Nov. 11 - filing *FTX's new CEO, John Ray moved to secure customer and debtor assets, including by halting trading and withdrawals on the exchanges and moving as many digital assets as possible to a new cold wallet custodian
@john_j_brown John Brown on x
Honest question: Why is FTX Intl filing for Chapter 11 in the US and not for bankruptcy procedure in Bahamas? That is, how is this beneficial to FTX management? Related: How i that even possible, given that FTX Intl had no ties with the US?
@smtuffy Sean Tuffy on x
lmao https://twitter.com/...
@desogames @desogames on x
The word of today is: “Unsecured”. https://twitter.com/... https://twitter.com/...
@grdecter @grdecter on x
Here's where the FTX scandal gets really interesting (and scary): The names and deposit amounts of every single FTX customer could become public in the Chapter 11 bankruptcy filing
@laurashin Laura Shin on x
1/ In the FTX bankruptcy, title over the assets stays with the customer AFAIU, this means people who managed to get their money out in the last shambolic days won't have it “clawed back,” as will happen with Celsius or Voyager, where customers are treated as unsecured creditors h…
@kadhim @kadhim on x
FTX: “There could be more than one million creditors”🤯 https://pacer-documents.s3.amazonaws.co m/ ...
@firstadopter Tae Kim on x
Pretty sure FTX's more than 100,000 creditors in its bankruptcy filing are not finding this cute https://t.co/CJ651V7c4c
@lananhtnguyen Lananh Nguyen on x
BREAKING: *FTX representatives have been in contact with the U.S. Attorney's Office, SEC, CFTC & dozens of federal, state, international regulatory agencies in the past 72 hours - court filing *FTX names new independent directors at main parent cos - filing By @akritiisharma

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