FTX asks Kraken to aid in liquidity crisis a day after the Binance rescue fell through, report says
- FTX approached Kraken for emergency funds on Thursday, according to a report from Axios.
- The move follows the failed takeover deal between Binance and FTX.
FTX has approached rival cryptocurrency exchange Kraken for emergency funds, according to a report from Axios.
The move is the latest plea for help from Sam Bankman-Fried's company, which has been reeling since a liquidity crunch began last week.
To avoid bankruptcy, FTX agreed on Tuesday to be taken over by Binance, but that deal fell through a day earlier. Binance walked away after initial due diligence into FTX's balance sheet revealed billions of dollars in assets shortfalls.
Bankman-Fried has been desperately trying to raise other funds to shore up cash for customer withdrawals and avoid the pitfalls of an ongoing run on the platform. Earlier on Thursday, he said he was in talks with Tron crypto token founder Justin Sun about a rescue.
FTX halted customer withdrawals earlier this week after about $5 billion worth of withdrawal requests came in on Sunday.
That came after CoinDesk reported last week that Bankman-Fried's Alameda Research trading firm held a large amount of illiquid FTT on its balance sheet, spurring speculation that the trading firm lacked sufficient liquidity.
The Securities and Exchange Commission and the Commodity Futures Trading Commission opened investigations months ago into whether FTX mishandled customer funds, Bloomberg reported Wednesday. The Justice Department is also investigating, according to the Wall Street Journal.
Separately, the Wall Street Journal reported FTX lent more than half of its $16 billion in customer funds to Alameda in total, with Bankman-Fried telling an investor this week that Alameda owes FTX about $10 billion.
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