A top exec at OKX explains his call with Sam Bankman-Fried as FTX scrambled for a rescue - and why he couldn't give him a billion-dollar lifeline

• In an interview with Insider, the director of financial markets for OKX recounted two phone calls he had with Sam Bankman-Fried before FTX collapsed.
• Bankman-Fried initially asked for $1 billion to $2 billion from OKX, but called back hours later asking for more.

As specifics about FTX's collapse continue to surface through court filings and tweetstorms, so too are details about Sam Bankman-Fried's scramble for a rescue in the days leading up to his firm's November 11 bankruptcy announcement.

On November 6, Binance CEO Changpeng "CZ" Zhao tweeted that Binance was liquidating $531 million of FTX's native token FTT, triggering a liquidity crisis at Bankman-Fried's firm. To save FTX, Bankman-Fried sought emergency capital from rival crypto exchanges, including OKX, which says it's the second-largest crypto exchange by spot trading volume.

On November 8, Lennix Lai, director of financial markets for OKX, got two phone calls from Bankman-Fried.

"The very first call that we received from Sam he said everything's under control, but they might need cash, one to two billion dollars max in short-term credit, in exchange for FTT value or equity in FTX," Lai told Insider in an interview.

He didn't reject the request, and said he was willing to help. But the phone call was late at night as Lai was in Southeast Asia, so he planned to go to sleep before reviewing the details with his team at OKX.

In fact, he thought he could take several days to go over options, and recalled that Bankman-Fried sounded calm while admitting the situation was his fault. In an optimal scenario, OKX would've created a strategic partnership with FTX, Lai explained, since it strengthens the industry if big players could support one another.

But a couple hours later Bankman-Fried called back with much more anxiety in his voice.

"He mentioned they were in a very critical situation, and only got a few hours," Lai said. "We didn't know what that meant. Also, they were talking about a lot more billions [of dollars], so that was difficult for us."

He still didn't turn down the 30-year-old FTX founder, but he couldn't immediately agree to a billion-dollar lifeline on the spot and knew that a bailout couldn't happen without help from Binance's Zhao.

Lai recognized that one of the core issues was FTX's reliance on FTT, so he advised Bankman-Fried to consult with Zhao on an effort to stabilize the token. Rebuilding confidence in FTT could buy the exchange some more time to secure a rescue, he added.

Hours later, Binance agreed to acquire FTX. But that deal fell through the next day, and FTX imploded in short order.

Greater transparency for crypto

In the coming months, Lai expects more crypto exchanges to adhere to greater transparency. Like other competitors, OKX already is facing more scrutiny from regulators, he said, but the company is trying to take a proactive role.

OKX was the first exchange to announce it will provide proof of reserves by a third-party audit, according to Lai.

Meanwhile, the market will take time to settle down, but ultimately the sector's Lehman Brothers moment will leave crypto better off.

"It's good for the industry, in the way that some exchanges will start cleaning up their mess, good in terms of transparency, stability," he said. "I know the space is going to be more transparent."