InfoNesia.xyz – FTX is struggling to stabilize its financial situation and has reached out to smaller rival exchange Kraken for financial help, according to an Axios report.
A “potential deal” is being discussed, two sources told the publication. Further details surrounding talks of an arrangement remain unclear—and it’s also unknown whether FTX is seeking acquisition or something like a large loan to stabilize its books.
Discussions, however, don’t mean a deal is a sure thing—far from it. And Kraken co-founder and departing CEO Jesse Powell has already noted via Twitter that he had seen several “red flags” in FTX’s business.
Kraken is based in the U.S., while FTX—whose international exchange is under fire—is based in The Bahamas. FTX CEO Sam Bankman-Fried claimed Thursday that FTX US users are “fine” despite the chaos.
“FTX International currently has a total market value of assets/collateral higher than client deposits,” Bankman-Fried explained in an apology Twitter thread Thursday.
Now, Bankman-Fried appears to be scrambling to save his company.
“There are a number of players who we are in talks with, LOIs, term sheets, etc.,” he said, adding that “Every penny of that—and of the existing collateral—will go straight to users, unless or until we’ve done right by them.”
When asked for a comment on whether FTX had approached it for financial help, a Kraken representative declined to comment but pointed Decrypt to Kraken’s blog post published Wednesday evening. It outlines the company’s efforts to remain solvent and financially stable through proof of reserves audits and also states that Kraken has no exposure to Alameda Research.
Kraken does have about 9,000 FTT tokens on FTX, however, but those are worth just $36,000 at time of writing, according to CoinGecko price data.
“Kraken is not affected by the recent FTX news in any material way,” the company said in its Wednesday post.
But Kraken co-founder and departing CEO Jesse Powell has strong opinions on the FTX fiasco.
“We need to raise our standards,” Powell told his Twitter followers. “The damage here is huge. An exchange implosion of this magnitude is a gift to bitcoin haters all over the world.”
Powell also pointed out many things he sees as “red flags” that appear to be a direct reference to FTX and Bankman-Fried: