The recent acquisition deal made with CZ’s Binance was not Sam Bankman-Fried’s first choice.
SBF was reportedly looking for Silicon Valley and Wall Street billionaires to bail out FTX.
FTX was reportedly seeking more than $1 billion, although that figure increased later.
This took place a few hours before inking the letter of intention with Binance.
According to a report by Semafor, FTX CEO Sam Bankman-Fried was actively pursuing a bailout deal with “deep pockets” in Silicon Valley and Wall Street.
The report revealed that the deal with Changpeng Zhao’s Binance was not the first choice for SBF. The crypto billionaire was seeking help from billionaires from Wall Street and Silicon Valley in order to fend off the offensive by rival Binance.
Sam Bankman-Fried Sought $5-$6 Billion for FTX bailout
Sam Bankman-Fried was out to get more than 1 billion dollars to save his exchange from the ongoing tussle with CZ’s exchange. The attempts to rally funds for FTX’s bailout reportedly took place a few hours prior to the deal with Binance. However, as the day progressed, the bailout amount got significantly higher, reaching as high as $6 billion, which likely led to the acquisition deal with rival Changpeng Zhao.
Alameda Research’s fate remains unclear. So far, all the tweets by SBF and Zhao have indicated that the bailout offer only covers FTX. This poses a contagion-level threat for lenders like BlockFi and Genesis who lent out millions to Alameda in exchange for $FTT as collateral.
$FTT dips below $3
The tussle between FTX and Binance has had a catastrophic impact on FTX Token (FTT). The token started the day at $9.36, marking a 59% decline from yesterday. When news of Binance’s Letter of Intent (LOI) to acquire FTX broke, traders rushed to short the token, anticipating that Alameda’s bailout by CZ was unlikely, spelling further trouble for FTT. What followed was a string of shorts against the token, causing it to plummet more than 80%, all the way down to $2.91. According to data from CoinGecko, FTT’s trading volume has surged almost 200%, reaching $3.32 billion.