FTX Files For Bankruptcy, CEO Steps Down

Cryptocurrency trade FTX filed for Chapter 11 chapter within the U.S. and its CEO Sam Bankman-Fried stepped down on Friday morning.

Key Takeaways

  • FTX filed for Chapter 11 chapter within the U.S. whereas its CEO Sam Bankman-Fried resigned on November 11.
  • The crypto trade shall be run by new CEO John J. Ray III. 
  • FTX reportedly did not inform all the 134 corporations named within the chapter submitting.

Chapter Course of Begins

FTX stated it might file for chapter safety for FTX.com, FTX U.S., and Bankman-Fried’s proprietary buying and selling agency Alameda Analysis, in addition to roughly 130 further affiliated corporations. There are 5 subsidiaries that aren’t affected by the chapter proceedings, together with LedgerX (previously FTX US Derivatives), FTX Digital Markets Ltd., FTX Australity Pty Ltd., and FTX Specific Pay Ltd.

FTX Workers Had been Not Knowledgeable

FTX reportedly did not notify all the 134 corporations named within the chapter submitting and workers discovered about it through Twitter. Social media posts declare that workers have been asking the CEO about their salaries, however haven’t obtained a solution.

It has additionally been reported that in spring Bankman-Fried offered FTX fairness to workers at a 50% low cost, and as chapter loomed, workers have been searching for to liquidate their property.

CoinDesk reported that solely an interior circle consisting of Bankman-Fried and some different executives knew what was occurring. It quoted a supply as saying FTX as being run by a “gang of children from the Bahamas” who all dated one another.

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FTX In The Palms of The New CEO

The crypto trade shall be run by John J. Ray III, although the outgoing chief will help with the transition.

“The FTX Group has invaluable property that may solely be successfully administered in an organized, joint course of. I wish to guarantee each worker, buyer, creditor, contract celebration, stockholder, investor, governmental authority and different stakeholder that we’re going to conduct this effort with diligence, thoroughness and transparency,” stated the brand new chief.

He additionally stated that stakeholders ought to perceive that the scenario has been fast-moving and that the brand new staff has solely been engaged for a short while.

The Backside Line

FTX went from a $32 billion valuation to chapter in a matter of days. It’s catastrophic not just for the crypto trade but additionally for your complete cryptocurrency market as FTX emerged as some of the recognizable manufacturers within the crypto world.

The crypto market was in deep pink on the time of writing, with Bitcoin buying and selling at $16,900 and Ether round $1,200. The native token of FTX, FTT, is down 90% previously week, buying and selling at $2.60.

(Rahul Nambiampurath contributed to this text.)