Former CEO Sam Bankman-Fried sent an apology letter to employees, revealing why the FTX “catastrophe” happened

The letter was posted on FTX’s Slack by another employee because Sam Bankman-Fried (SBF) is no longer an employee of the company, Business Insider’s source said. “ I feel extremely guilty for what happened. I am sorry for what happened to you ,” SBF wrote in the letter.

He also added: “ I didn’t mean for any of this to happen. I would do anything to go back and redo everything. You guys are my family. I lost that. Our old house is now just an empty warehouse filled with screens .”

In the letter, SBF also talked about the reasons that caused the FTX crypto exchange to go bankrupt. SBF revealed that at the beginning of 2022, FTX still has about $60 billion in collateral. However, the crypto market slump has halved the value of the company’s collateral, while its liabilities are $2 billion.

In early November, Bitcoin suddenly plunged and lost more than 5% of its value. This has reduced the value of FTX’s collateral to $17 billion and its liabilities to $8 billion, SBF said. Also in November, mass withdrawals continued to reduce the value of FTX’s collateral to $9 billion.

On November 11, FTX Group officially filed for bankruptcy with a US court after running out of liquidity and stopping the withdrawal service.

SBF admits it was not aware of the importance of margin as well as the potential risks afterwards.

In the letter, the former FTX CEO did not mention that he used client money to transfer to Alamenda Research, another company also founded by SBF.

Despite accepting the collapse of FTX, the former CEO still asserted in the letter that he nearly saved the crypto empire in the last few hours before signing the bankruptcy petition.

” We were able to raise significant funding. Potential billions of dollars in funds could have come in about eight minutes before I signed the Chapter 11 bankruptcy ,” SBF said.

Ref: CNBC, Business Insider