FTX Files for Bankruptcy, SBF Resigns
NASSAU – Disgraced cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy protection after its native token FTT collapsed on Tuesday. FTX US has also frozen all withdrawals, exacerbating uncertainty among millions of investors. CEO Sam Bankman-Fried (SBF) resigned from the company Friday morning; John Ray III now serves as CEO.
In filing for Chapter 11 bankruptcy, the company is able to move forward with a path to restructure, rather than Chapter 7 which liquidates all assets. For investors, Chapter 11 is the better way for FTX to move forward because it provides more asset protection.
The filing includes FTX’s sister company, Alameda Research. Liabilities at each company are estimated at $10 - $50 billion in value. Binance was actively acquiring FTX before its due diligence revealed many risks in the deal, leading the company to back out of the acquisition.
The Nassau-based company had all of its headquarters operations halted by Bahamanian regulators on Thursday. Mr. Bankman-Fried apologized for the exchange’s downfall on Twitter saying, “hopefully things can find a way to recover.”
