FTX is saved by Justin Sun and OKX in a billion dollar deal

  • FTX chief SBF is seeking to raise $1 billion each from Tron founder Justin Sun, rival OKX and stablecoin issuer Tether.
  • BlockFi has halted withdrawals on its platform citing concerns over the FTX crisis and sources say BlockFi has provided loans to FTX sister company Alameda Research.

Sam Bankman-Fried is dealing with a major crisis surrounding his own FTX exchange as a major liquidity crunch unfolded over the past week. Initially, Binance stepped in to acquire the assets of FTX.com, however, after due diligence by the company, they decided to pull out citing reasons of “mismanagement of customer funds and investigations by US agencies” .

Reports have now surfaced that SBF has approached Tron’s Justin Sun to help him out of the current slump. In a desperate attempt to save the FTX exchange from a liquidity crunch, Sam Bankman-Fried is seeking to raise a staggering $9.4 billion. According to sources familiar with the matter. SBF is seeking to raise $1 billion each from Tron founder Justin Sun, rival OKX and stablecoin issuer Tether.

At the same time, Justin hinted at the possibility of acquiring FTX. On Thursday, November 10, Sun wrote that his team was working with FTX to provide a solution to the current situation. “My team worked around the clock to prevent further deterioration. I trust that the situation is manageable by following the holistic approach with our partners. Stay tuned,” he said.

Justin Sun on FTX recording

During his recent interview with Bloomberg, Justin Sun was asked if he would provide enough liquidity to FTX. He said they are still doing a thorough check to see if they can bail out FTX. He also added that they would take care of their customers first and then see what needs to be done.

However, Sun added that letting FTX collapse would be a blow to the entire crypto space. In another development, FTX has entered into an agreement with Tron to allow its users to trade certain assets. In an announcement Thursday, the crypto exchange declared:

We are happy to announce that we have entered into an agreement with Tron to establish a special facility allowing holders of TRX, BTT, JST, SUN and HT to exchange assets from FTX 1:1 to external wallets.

Later Thursday, SBF also posted a series of tweets noting, “Right now, my #1 priority – hands down – is getting users right. And I will do everything to achieve it. Take responsibility and do what I can”. He also said he would do everything this week to raise cash.

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Some sources have also said that FTX is in talks with Daniel Loeb’s Third Point hedge fund.

Crypto Lender BlockFi Halts Withdrawals

Earlier today, crypto lender BlockFi announced it had halted withdrawals citing a “lack of clarity” on the ongoing crisis surrounding FTX US, FTX.com and sister trading house Alameda Research. As a result, the crypto lender asked customers to refrain from depositing funds into their BlockFi wallets or interest accounts.

In its second quarter report, BlockFi said total deployable customer assets were $3.9 billion. Amid this year’s severe stock market crash, crypto lending platforms have faced tremendous challenges. Earlier this year, with the collapse of Three Arrows Capital, BlockFi suffered an $80 million hit due to bad debts.

A source familiar with the matter said BlockFi was in the process of transferring its assets to FTX for safekeeping. However, the majority of their assets have still not been moved. The person familiar with the matter said the crypto lender provided loans to Alameda Research, but did not discuss the amount. The person also said:

The loans are over-collateralized with liquid assets – including shares of Robinhood Inc. – but BlockFi is no longer certain of the origin of the funding for its line of credit with FTX US and the guarantee of the Alameda loans.

This raised concerns that BlockFi may have used customer funds to offer loans to Alameda Research.

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