FTX CEO Sam Bankman-Fried warns FTX investors of bankruptcy: “Without more capital, bankruptcy is likely”

Today is probably one of the worst days for FTX CEO Sam Bankman-Fried, who was once called the King of Crypto. It was one bad news after another. A few hours ago, Bankman-Fried told investors that the company is seeking emergency funding to meet withdrawal requests. Bankman-Fried added that FTX faces a liquidity shortfall of up to $8 billion, WSJ reported. The revelation came just hours after Binance backed out of the acquisition deal to rescue the company.

With the future of FTX now uncertain, FTX CEO Sam Bankman-Fried warned investors will be forced to file for bankruptcy if it doesn’t get the cash infusion, Bloomberg reported Wednesday. The publication also added that the company exchange faces an $8 billion shortfall.

Earlier today, WSJ reported that Binance has walked away from the deal to acquire FTX. “Crypto exchange Binance said that it would walk away from an initial offer to acquire its competitor FTX after a review of the company’s structure and books, the crypto exchange said in a statement,” WSJ reported.

Meanwhile, investors have withdrawn at least $6 from FTX as the crypto exchange continues on the downward spiral, according to a report from Reuters, citing a message to staff by its CEO Sam Bankman-Fried. “On an average day, we have tens of millions of dollars of net in/outflows. Things were mostly average until this weekend, a few days ago,” Bankman-Fried wrote in the message.

“In the last 72 hours, we’ve had roughly $6b of net withdrawals from FTX,” he wrote, adding that withdrawals at FTX’s main unit, FTX.com, are “effectively paused,” an issue that would be resolved in “the near future.”

Besides, FTX founder and CEO Sam Bankan-Fried is also under SEC investigation relating to the liquidity crisis and handling of customer funds. Bloomberg reported that US regulators are investigating whether FTX.com “properly handled customer funds,” as well as its relationship with other subsidiaries of Sam Bankman-Fried’s crypto empire.

We will update you as the news unfolds.