Tron is prepared to pump in billions to rescue beleaguered cryptocurrency exchange FTX, the company’s founder Justin Sun said on Friday.
FTX CEO Sam Bankman-Fried told investors on Wednesday that the company needs at least $4 billion in new investment to stay afloat since it now has a shortfall of up to $8 billion.
Sun entered into negotiations with FTX after Binance CEO Changpeng "CZ" Zhao walked away from the deal to acquire FTX citing corporate due diligence, news reports alleging mishandled customer funds and U.S. agency investigations against the Bahamas-based exchange.
When asked by Bloomberg if Tron had the resources to jump in to rescue FTX from going bankrupt, Sun said the company is ready to cover losses once it finished doing its own due diligence.
“I don’t have an exact number, but on our side, we know the concept, and I think at this kind of level there is something on the table here,” Sun said.
Taking A Different Approach From Binance
In contrast to Binance, Sun said Tron was approaching the deal differently, however, his customers were his priority.
“We will take care of our customers first and then we will start to measure it and see what we can do here. We don’t want to come in too much in the first step,” Sun said.
Meanwhile, U.S. regulators are looking closely at how FTX.com has handled customer funds and engaged in crypto-lending.
The SEC wants to ascertain how the cryptocurrency exchange handled customer funds during a liquidity crisis and its involvement in crypto lending.
Crypto Market Under Heavy Pressure
The woes of FTX are the most recent indicator of trouble in the crypto industry, where prices have fallen this year as investors have fled riskier investments due to a general decline in financial markets.
Bitcoin BTC/USD is down more than 65% in 2022 after experiencing rapid growth in 2020 and 2021, though it is currently trading up 3% at $17,480 levels.
The world’s second-largest cryptocurrency Ethereum ETH/USD meanwhile is trading up 4% at around $1,300 levels on Friday.
Tron TRX/USD is trading up 2% at 0.057 and FTX's token, FTT FTT/USD, is trading up 25% at $3.5 on the back of Sun’s assertions.
Interestingly, according to Bloomberg Billionaires Index, the net worth of Bankman-Fried's FTX net worth is now $1, down from $16 billion in a matter of days. Bankman-Fried is even off the Forbes Billionaires List.
Photo: Gorev Evgenii via Shutterstock
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