FTX Files For Bankruptcy As CEO Sam Bankman-Fried Resigns

According to a statement the company shared on Twitter, FTX has filed for Chapter 11 bankruptcy in the US. The cryptocurrency exchange’s CEO Sam Bankman-Fried has also stepped down from his position as chief executive officer and has been replaced by John J. Ray III. 

The latest development follows just days after the world’s biggest cryptocurrency Binance announced that it was acquiring FTX. According to Binance’s CEO Changpeng Zhao, the company decided to acquire FTX after its CEO, Sam Bankman-Fried asked Binance for help. “To protect users, we signed a non-binding LOI, intending to fully acquire FTX and help cover the liquidity crunch. We will be conducting a full DD in the coming days,” Changpeng Zhao shared in a tweet. 

The next day, however, Binance rescinded its decision to acquire the company. “In the beginning, our hope was to be able to support FTX’s customers to provide liquidity. But the issues are beyond our control or ability to help,” Binance tweeted on Wednesday. 

FTX’s Alameda Research Research, an approximated 130 additional affiliated companies are part of the voluntary proceedings. The Chapter 11 proceedings exclude the following subsidiaries: LedgerX LLC, FTX Digital Markets Ltd., FTX Australia Pty Ltd., and FTX Express Pay Ltd. According to FTX’s new CEO, “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.”

He also added that “The FTX Group has valuable assets that can only be effectively administered in an organized, joint process. I want to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority, and other stakeholder that we are going to conduct this effort with diligence, thoroughness, and transparency.”

He went on to also add that stakeholders need to understand that the recent events have been happening fast and that the new team only started their work recently. He also encouraged them to review the materials filed on the docket on the proceedings in the imminent days for more information.

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