At 10 o'clock tonight, Beijing time, FTX founder SBF sent 22 tweets in a row, responding to the reasons behind FTX's recent liquidity crisis.
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Here's a translation of SBF's tweet:
1) I'm sorry. This is the most important thing, but I screwed up and I should have done better.
2) I should also communicate more recently (with the outside world). But because I was tied down during the previous acquisition deal with Binance, I wasn't allowed to speak much publicly. Of course, I am personally to blame for where we are today.
3) The following are the latest developments of things: Please note that these are about FTX INTERNATIONAL (FTX INTERNATIONAL), not FTX US (FTX US station), FTX US users are all fine now. Also, all numbers below are rough.
4) The total market value of FTX International's current assets/collateral is higher than customer deposits (varies with price). But this is not the same as liquidity that can be delivered - you can tell from the withdrawal status. (These assets) liquidity varies widely, from very large to very small.
5) I'm still filling in the specifics of the whole story. As an executive, I screwed up twice:
For the first time, the imperfect internal labeling of the bank-related accounts meant that my perception of the user's margin was greatly skewed, which I thought was low.
6) My previous feeling:
Leverage: 0x;
USD liquidity ready for delivery: 24x average daily withdrawals
The actual situation:
Leverage: 1.7x;
Liquidity: 0.8x Sunday withdrawal amount
Blessings never come, but misfortunes never come singly. What we saw on Sunday was about $5 billion in withdrawals -- well beyond margins.
7) So, I have two mistakes. It also tells me a lot of things, both in particular and in general, that I behave badly.
Third time (mistake), lack of communication, I should have told everyone more, I'm sorry. (At that time) I had a lot of things to do, and I didn't update everyone in time.
8) So we got to where we are today, it's a bad situation, it's my responsibility, I'm sorry.
9) In summary: Right now, my number one priority - so far - is to be accountable to users. I will do my best to do this. Take responsibility and do my best.
10) So, right now, we're taking a week and doing what we can to improve liquidity.
I can't make any promises about it, but I will try and give everything I have if it makes it work.
11) We are negotiating with some teams, including signing a letter of intent (LOI), investment term sheet (term sheet), etc. Everything depends on the situation, and we are also waiting for the results.
12) Every penny of it (new investment), along with existing collateral, will go directly to the user until it is paid off. Beyond that, investors — old and new — and FTX employees, they are not responsible for any mistakes.
13) Because I was the CEO before the mansion fell, which means *I* have a responsibility to make sure things run smoothly. *I*, should charge forward and take responsibility for everything. But I obviously didn't make it, I'm sorry.
14) So, what does this mean for the future? I'm not sure, it depends on what happens next week. Here are some things I know.
15) First, Alameda Research is winding down the deal anyway. They didn't do the weird stuff I've seen on Twitter (note: Alameda Research is rumored to have lost billions of dollars on the LUNA deal) - and it wasn't a big deal at all. Regardless, Alameda Research will no longer trade on FTX.
16) Second, in any case where FTX continues to operate, its first priority will be to achieve radical transparency - as close to on-chain transparency as possible: letting people know *exactly* what is happening on-chain.
17) FTX's governance will be subject to rigorous scrutiny by all stakeholders. If you don't need me, I won't be around. All stakeholders—investors, regulators, users—will play a big role in how it works.
There is only trust.
18) But all of these are not the most important thing now, the most important thing now is trying to be worthy of customers.
19) A few final words: This matter concerns FTX International only. FTX US, the US-based exchange that only accepts Americans, has not been financially affected by this shitshow. It (FTX US) is 100% liquid. Every user can fully withdraw (minus GAS fees, etc.).
An update on the future of FTX US will be posted shortly.
20) At some point, I may have a lot to say about a particular sparring partner (peer). But you have to know, the glass house (Odaily note: SBF previously called the conflict between itself and CZ in the station letter "like a glass house throwing stones").
So for now, I just want to say: Play well and you win.
21) The above is not advice of any kind. I'm not being careful with my wording here, nor is it any advice in a technical or legal sense; it's likely that I'm not describing things correctly, although I'm trying to be transparent. I'm not a good speaker and I may have said something wrong.
22) Last but not least, I sincerely apologize and we will continue to share the latest situation as we have it.
