Amid one of the largest meltdowns in the history of the cryptocurrency industry, caused by the liquidity crisis at FTX, the crypto exchange’s institutional head has resigned, telling his former clients that he was unaware of the problems that have led to its demise.
Indeed, Zane Tackett, the now former Head of Institutional Sales at FTX, said that he and his “entire team, from sales to support, every single team member had 0 insight into the issues that FTX was facing,” according to his letter shared by crypto reporter Colin Wu on November 11.
Stressing that the entire VIP ream “was left completely in the dark and were in no way aware that FTX was insolvent or that our customer assets were at any point not backed 1:1,” Tackett explained:
“We first discovered that FTX was insolvent when Sam [Bankman-Fried] tweeted about it on Tuesday morning EDT. We were given no pre-notice or warning, we merely received a link to the tweet in our general slack channel.”
Acknowledging and repeatedly apologizing over the company’s poor handling of the crisis, Tackett insisted that “none of us on the VIP team would ever intentionally mislead clients or provide information we knew to be false,” which is why:
“I resigned on Tuesday but planned to stay on to help clients as much as I could until things settled, however as I have been removed from internal channels, as has most of my team as far as I know, and outside of that, I honestly don’t know who all is left at FTX.”
With this in mind, he admitted that “I fear we will not be able to provide you with the level of service you deserve and want to bring this to your attention as soon as possible,” adding that everyone was still “waiting for an update from Sam on what the plans for FTX are and will share as soon as we have it.”
On November 10, FTX CEO Sam Bankman-Fried’s Slack message to employees was leaked, in which he announced a raise for the following week with the potential participation of Tron (TRX) and promised more details.
Meanwhile, Tron founder Justin Sun said that he was prepared to provide FTX with billions in aid after “due diligence,” as tweeted by Bloomberg News reporter Tom Mackenzie.
SBF’s role and crisis consequences
At the same time, more details are coming out on the CEO’s role in the crisis, including the information that he secretly moved $4 billion of FTX funds, including customer deposits secured by tokens such as FTX Token (FTT), to his other company, Alameda Research, as Finbold earlier reported.
Unsurprisingly, the recent events have attracted the attention of financial regulators, including the U.S. Commodity Futures Trading Commission (CFTC), whose representative Kristin Johnson asserted the need for establishing a regulatory framework that would protect consumers in the crypto space.
In the meantime, the crypto market has been suffering carnage directly caused by the developments surrounding FTX but has also gotten a moment of respite after the October consumer price index (CPI) data showed a lower-than-expected rise in inflation.