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FTX files for bankruptcy protection, CEO Bankman-Fried resigns

Posted:Nov 11, 2022 16:50 Category: Blockchain , Crypto , Regulatory , Posted by
Sharon

FTX.com said it has filed for bankruptcy protection in the U.S. and its CEO Sam Bankman-Fried has stepped down.

In a release posted on Twitter, the company said that FTX.com and 130 related entities are included in the bankruptcy filing in the District of Delaware. These include Alameda Research.

John J. Ray III has been appointed as CEO. The release said that many employees will remain to help ray and independent professionals during the bankruptcy proceedings. 

“The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders, Ray said.

“The FTX Group has valuable assets that can only be effectively administered in an organized, joint process.”

Ray said that events are moving fast and he pledged to conduct the process in a thorough and transparent way. 

Earlier this week Bankman-Fried told investors that he needed a $4 billion cash injection to avoid bankruptcy and keep the company afloat. There is reportedly an $8 billion shortfall in the accounts. 

A momentous week for the crypto markets began last week, when Binance, the largest crypto exchange, said it was offloading all of its holdings of FTT, FTX’s native token.

Just days later, Binance CEO Changpeng Zhao revealed that FTX had approached his company seeking a bailout. However, this possibility fell apart after Binance began due diligence and said there was nothing it could do. 

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