FTX, the Bahamian crypto exchange founded by Samuel Bankman-Fried (SBF) has filed for chapter 11 bankruptcy in the United States. According to a tweet today, not only did the exchange file for bankruptcy, but its CEO also resigned from its position.
Unfortunately, this bankruptcy filing signals a drastic fall from grace for the exchange which was once valued at $32 billion. Interestingly, the filing covers over 100 other affiliates of the exchange including FTX US and Alameda.
However, the proceedings do not include some other FTX subsidiaries like LedgerX LLC, FTX Digital Markets Ltd., FTX Australia Pty Ltd., and FTX Express Pay Ltd.
With the Chapter 11 filing, the FTX Group can now assess its situation and work out a restructuring plan. The firm would be hoping to make investors whole again during this period while it continues with its daily activities
Although SBF will stay on to assist with an orderly transition, he is now succeeded by John Jay Ray III.
Unfortunately, FTX’s woes began earlier in the week after Changpeng Zhao (CZ), CEO of Binance announced it will be selling its remaining FTT tokens following concerns over Alameda’s balance sheet. Afterward, customers swamped the platform to request withdrawals of their holdings resulting in the crash of its value.
In an attempt to help, Binance had offered to acquire the embattled FTX exchange but later pulled out as previously reported. Binance withdrew from the deal due to mishandling of users’ funds and several other reasons according to CZ. This decision has left Sam and FTX on the verge of collapse. The unthinkable implosion of FTX has left many onlookers in shock.
Crypto Firms Embrace Bankruptcy
The cryptocurrency industry has witnessed various layoffs and business closures in the past months. But that is a result of the prolonged crypto winter season. FTX’s case is not an isolated one as the exchange joins a host of other crypto firms in choosing the bankruptcy option.
Despite the recent negative occurrences around the crypto market, a number of crypto firms however remain hopeful for a positive turnaround.