FTX shortly before the collapse after Binance has given up the rescue

ftx is about to collapse when Chief Sam Bankman-Fried tries to secure billions of dollars to save his empire after Binance has dropped a rescue of one of the world's greatest crypto exchanges in the eleventh hour.

The risk capital company Sequoia Capital said that it would reduce its investment in FTX in the amount of $ 214 million to zero after a run on the stock exchange in the past few days gave a massive hole in its balance sheet and caused serious doubts about her survival.

"In the past few days, a liquidity crisis has created a risk of solvency for FTX," said Sequoia on Wednesday in a message to the investors of his fund.

The abrupt turn in the assets of FTX and his sister trade company Alameda Research marks a spectacular fall for Bankman-Fried, a 30-year-old dealer and entrepreneur who is one of the most prominent personalities in the industry. Bankman-Fried was one of the richest people in the world a few months ago, but large parts of his $ 24 billion will fizzle out when FTX and Alameda Research go bankrupt.

A collapse would also include FTX Blackrock, the Canadian Ontario Teachers' Pension Plan, Softbank and the hedge fund billionaire Paul Tudor Jones and Izzy Englander.

In the past few days, Bankman-Fried has asked investors to support support to support the stock exchange because customers recovered their money out of fear for their financial health. According to people who are familiar with the matter, FTX needs $ 8 billion to stabilize the ship.

Bankman-Fried also turned to competing crypto exchanges, including OKX and Binance, which led to a short-lived plan by Changpeng Zhao, the CEO of Binance, to buy FTX and secure the funds of the customers.

ZHAO left the table after less than 48 hours of careful examination after he had recognized the extent of the financial problems and possible misconduct at FTX, which made the deal impossible.

"As a result of the entrepreneurial Due Diligence and the latest news reports on improperly treated customer funds and presumed investigations by the US authority, we have decided that we will not continue the potential takeover of FTX.com," said Binance.

The US stock exchange supervisory authority Securities and Exchange Commission has expanded an investigation into FTX, which, according to a person familiar with the matter

The Wall Street supervisory authority initiated the investigation months ago, but after the announcement of Binance's takeover plans, the person added additional information on Tuesday. The agency also examines FTX's relationship with a US company, FTX Us.

Bitcoin, the largest cryptocurrency and a trust barometer in the industry, fell to $ 15,700 before it stabilized at $ 16,600, which corresponds to a decrease of 10 percent compared to Wednesday morning. Investors and dealers fear that the collapse of FTX and Alameda will trigger another wave of market panic and losses for those who are exposed to companies about credit and trade relationships.

"Given the size and the interrelationships of FTX and Alameda Research with other units of the crypto ecosystem.

Analysts from Moody’s said that the effects of turbulence in the cryptos sector on the traditional financial world would probably be limited.

Fadi Massih, Vice President of Moody’s Investors Service, said: "The lack of regulatory supervision and the general opaque of the sector facilitate risky financial strategies and expose companies to an environment in which rumors can become self -fulfilling prophecies."