QUICK TAKE:
FTX founder SBF finally cleared the air about some cryptic tweets he made this week
FTX has $9 billion in illiquid assets, which SBF admitted may have a lesser fair market value
There was gossip on Twitter earlier suggesting SBF’s weird tweets were an attempt to cover his trail
Sam Bankman-Friend, the founder of the bankrupt cryptocurrency exchange FTX, forced crypto Twitter to solve a puzzle over the past day. He started posting random letters on Twitter on November 14, which were perplexing at first. Many thought the founder had either been hacked, was doing drugs, or had simply lost his mind.
However, on November 15, these letters posted by him over a 24-hour span finally spelled “WHAT happened”. Further, the following tweets became partly self-confessional and partly attempts to explain to the public the last situation of FTX before the thunderstorm. He made another tweet on November 16 which finally made some sense.
SBF first highlighted the fact that just a few weeks ago, FTX was handling $10 billion in volume and billions of transfers in a day. However, he added that the company had more leverage than he realized. Thus, the ensuing bank run and market crash exhausted the exchange’s liquidity. So what can he do to remedy this? “Raise liquidity, make customers whole, and restart,” said SBF, who thinks he has failed enough for one month.
16) Maybe I'll fail. Maybe I won't get anything more for customers than what's already there.
I've certainly failed before. You all know that now, all too well.
But all I can do is to try. I've failed enough for the month.
And part of me thinks I might get somewhere.
— SBF (@SBF_FTX) November 16, 2022
SBF Shares Future Goals
But first, SBF has to sort out the company’s current financials, as it reels with a large hole and an inability to make users whole. As per his tweet, FTX has liquid assets worth $8 billion, semi-liquid assets worth over $5.5 billion, and Illiquid assets worth over $3.5 billion.
Although, he added that the $9 billion in illiquid assets may have a much smaller fair value based on the current market price. This is because many of them are held in Solana-based tokens like MAPS and OXY. These tokens have a low liquidity market and have been sliding down price charts recently. Nevertheless, he wrote,
And yeah, maybe that $9b illiquid M2M isn’t worth $9b (+$1b net). OTOH–a month ago it was worth $18b; +$10b net.
Interestingly, these numbers differed from what Zane Tackett, former head of Institutional sales at FTX shared from FTX’s balance sheet last week. As per the details shared by Tackett, FTX held liquid assets worth $900 million, less liquid assets worth $2.037 billion, and illiquid assets worth $3.2 billion.
Nevertheless, SBF believes that his current goals are to clean up, focus on transparency, and make FTX customers whole. This will be done by raising fresh liquidity, which might come as a challenge for the bankrupt firm.
SBF also said that he intends to prioritize customers over investors, giving further credence to institutions such as Sequoia and Softbank, which recently moved to mark their FTX investments down to zero.
14) My goal:
a) Clean up and focus on transparencyb) Make customers whole
— SBF (@SBF_FTX) November 15, 2022
Notably, Zhu Su, co-founder of 3AC, took a jibe at SBF’s intent to start over, commenting,
Lets auction these “assets” in a dutch auction, starting from your criminal mark price, and see where buyers show up
Clearing the Evidence Trail
Now that the FTX founder has finally made sense of his cryptic tweets, it could put to rest several conspiracy theories that were bubbling on Twitter. Soon after SBF started posting letters on Twitter, users started speculating on the meaning of the tweets. Some suggested that the exec was posting his weird tweets while simultaneously deleting incriminating tweets posted earlier. This would allow him to surpass tweet count bots that send alerts whenever a new tweet is added or deleted.
Ok that's it, SBF is actually a supervillain. The man thinks we're all idiots, and we haven't really done anything to prove him wrong.
Turns out each tweet he posted was to cover for a tweet he deleted. Bots check tweet count and since it hasn't changed, they don't dig deeper.
— quit (@0xQuit) November 15, 2022
Further, as per the crypto insights platform, The TIE, SBF deleted at least 118 tweets in the previous year. It added that more may have been missed due to tweets being recorded by its software every 15 minutes, during which time SBF could have offset the difference with newer tweets.
