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Nov 14, 2022 32 tweets 4 min read Read on X
1) What
2) H
3) A
4) P
5) P
6) E
7) N
8) E
9) D
11) I'll get to what happened. But for now, let's talk about where we are today.
12) To the best of my knowledge, as of post-11/7, with the potential for errors:

a) Alameda had more assets than liabilities M2M (but not liquid!)
b) Alameda had margin position on FTX Intl
c) FTX US had enough to repay all customers

Not everyone necessarily agrees with this
13) My goal—my one goal—is to do right by customers.

I’m contributing what I can to doing so. I’m meeting in-person with regulators and working with the teams to do what we can for customers.

And after that, investors. But first, customers.
14) My goal:

a) Clean up and focus on transparency
b) Make customers whole
15) A few weeks ago, FTX was handling ~$10b/day of volume and billions of transfers.

But there was too much leverage--more than I realized. A run on the bank and market crash exhausted liquidity.

So what can I try to do? Raise liquidity, make customers whole, and restart.
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.
17) I know you've all seen this, but here's where things stand today, roughly speaking. [LOTS OF CAVEATS, ETC.]

Liquid: -$8b
Semi: +$5.5b
Illiquid: +$3.5b

And yeah, maybe that $9b illiquid M2M isn't worth $9b (+$1b net).

OTOH--a month ago it was worth $18b; +$10b net.

18) Truth and Beauty
19) Once upon a time--a month ago--FTX was a valuable enterprise.

FTX had ~$10-15b of daily volume, and roughly $1b of annual revenue. $40b of equity value.

And we were held as paragons of running an effective company.
20) I was on the cover of every magazine, and FTX was the darling of Silicon Valley.

We got overconfident and careless.
21) And problems were brewing. Larger than I realized.


Leverage built up-- ~$5b of leverage, backed by ~$20b of assets which were....

Well, they had value. FTT had value, in EV! But they had risk.
22) And that risk was correlated--with the other collateral, and with the platform.

And then the crash came.

In a few day period, there was a historic crash--over 50% in most correlated assets, with no bid side liquidity.

And at the same time there was a run on the bank.
23) Roughly 25% of customer assets were withdrawn each day--$4b.

As it turned out, I was wrong: leverage wasn't ~$5b, it was ~$13b.

$13b leverage, total run on the bank, total collapse in asset value, all at once.

Which is why you don't want that leverage.

24) Shrapnel
25) Last night I talked to a friend of mine.

They published my messages. Those were not intended to be public, but I guess they are now. Image
26) Well, that gives some color, I guess.

It sucks. I'm really sorry that things ended up as they did. And as I said--I'm going to do everything I can to make it more right.
27) A few thoughts:

a) It's *really* hard to be a regulator. They have an impossible job: to regulate entire industries that grow faster than their mandate allows them to.

And so often they end up mostly unable to police as well as they ideally would.
28) Even so, there are regulators who have deeply impressed me with their knowledge and thoughtfulness. The CFTC has; the SCB, and VARA, too. And others, scattered.

But most are overwhelmed.
29) Which means that interacting with regulatory structures can be really frustrating: a *huge* amount of work--much of it arbitrary--and relatively little customer protection.

Fuck that. You all deserve frameworks that let regulators protect customers while allowing freedom.
30) (Some of what I said was thoughtless or overly strong--I was venting and not intending that to be public. I guess at this point what I write leaks anyway.)
31) And in the future, I'm going to care less about the dumb, contentless, "good actor" framework.

What matters is what you do--is *actually* doing good or bad, not just *talking* about doing good or *using ESG language*.
32) Anyway -- none of that matters now.

What matters is doing the best I can.

And doing everything I can for FTX's customers.

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More from @SBF_FTX

Nov 11, 2022
1) Hi all:

Today, I filed FTX, FTX US, and Alameda for voluntary Chapter 11 proceedings in the US.
2) I'm really sorry, again, that we ended up here.

Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them.

Ultimately hopefully it can be better for customers.
3) This doesn't necessarily have to mean the end for the companies or their ability to provide value and funds to their customers chiefly, and can be consistent with other routes.

Ultimately I'm optimistic that Mr. Ray and others can help provide whatever is best.
Read 5 tweets
Nov 10, 2022
1) I'm sorry. That's the biggest thing.

I fucked up, and should have done better.
2) I also should have been communicating more very recently.

Transparently--my hands were tied during the duration of the possible Binance deal; I wasn't particularly allowed to say much publicly. But of course it's on me that we ended up there in the first place.
3) So here's an update on where things are.


Read 22 tweets
Nov 8, 2022
1) Hey all: I have a few announcements to make.

Things have come full circle, and’s first, and last, investors are the same: we have come to an agreement on a strategic transaction with Binance for (pending DD etc.).
2) Our teams are working on clearing out the withdrawal backlog as is. This will clear out liquidity crunches; all assets will be covered 1:1. This is one of the main reasons we’ve asked Binance to come in. It may take a bit to settle etc. -- we apologize for that.
3) But the important thing is that customers are protected.
Read 6 tweets
Nov 6, 2022
1) A huge thank you to everyone who has supported us--we're excited to keep climbing together.

And especially to those who stay level headed during crazy times. We deeply appreciate it.
2) A bunch of unfounded rumors have been circulating. You can see .

FTX keeps audited financials etc. And, though it slows us down sometimes on product, we're highly regulated.
3) We've already processed billions of dollars of deposits/withdrawals today; we'll keep going. (Taking up anti-spam checks to process more--sorry if you got those. We're hitting node rate capacity, will keep going.) Also tons of USD <> stablecoin conversions going on.
Read 5 tweets
Nov 6, 2022
1) Posting about what everything wants to know more about:

2) Seriously SEND is awesome.

It's the omni box for money (soon we'll merge blockchain into the same box!)

Right now, sending money internationally is a pain in the ass. People are paying 10's of percent's, waiting weeks, and hoping that it lands.

Crypto can do better.
3) It works domestically and internationally. It works with relatives and with employees.

Because that's how blockchain works:

it just works.
Read 5 tweets
Nov 5, 2022
1) I was a significant donor in both D and R primaries.

Supporting constructive candidates across the aisle to prevent pandemics and bring a bipartisan climate to DC.

And working with them to support permissionless finance.
2) As part of this, @rsalame7926 and I signed up campaigns to accept crypto; and gave some, including millions to Senate & House Republicans.
3) If you want to contribute crypto, reach out to your elected officials and ask if they accept it; FTX is happy to sign them up!
Read 5 tweets

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