Sam Bankman-Fried’s cryptocurrency exchange FTX has filed for bankruptcy. The bankruptcy attributed to Alameda Research estimates the company has between $10 and $50 billion in debt.
Sam Bankman-Fried resigns as CEO of FTX
According to a company statement posted on Twitter, exchange founder and CEO Sam Bankman-Fried has officially resigned. FTX, which has suspended withdrawals, has filed for Chapter 11 bankruptcy in the US. According to the press release, Bankman-Fried stepped down as CEO. John J. Ray III will serve as the new CEO.
The company announced on Friday that FTX has filed for bankruptcy in the United States. CEO and co-founder Sam Bankman-Fried has also resigned, but will “help with an orderly transition.” “We have long days and hard work ahead of us in the short term,” the new CEO said in his statements. He described filing for bankruptcy as “the beginning of a path forward.”
The bankruptcy filing estimates Alameda Research owes between $10 and $50 billion. According to the press release, the FTX Group, which includes the FTX.com entity as well as FTX US, Alameda Research, and “approximately 130 additional subsidiaries,” has filed for chapter 11 bankruptcy proceedings. Meanwhile, Chapter 11 bankruptcy proceedings are opened when the company hopes to restructure its operations, rather than chapter 7 bankruptcy proceedings that simply liquidate assets.
The stock market will continue on its way with the new team
Companies that file for Chapter 11 bankruptcy can continue their day-to-day operations. In a statement, Ray said that activities will continue with a new team:
The FTX Group has valuable assets that can only be effectively managed in an organized, collaborative process. I want to assure every employee, customer, creditor, contracting party, shareholder, investor, government official and other stakeholders that we will conduct this effort with due diligence, rigor and transparency. Things are “moving fast” and the new team has just begun.
Meanwhile, the price of Bitcoin immediately lost more than $1,000 on the news of the bankruptcy. It fell as low as $16,500 within minutes. Bankman-Fried announced that FTX was experiencing “liquidity” issues earlier this week. He said earlier that Binance had offered to buy the company. Then, Tron announced a deal with its founder Justin Sun to stop TRX-based tokens. The status of this deal was unclear at press time.
Now, Chapter 11 transactions will include several of FTX’s subsidiaries. These are specifically LedgerX LLC, FTX Digital Markets Ltd., FTX Australia Pty Ltd. and FTX Express Pay Ltd. cryptocoin.com As we have reported, Binane CEO CZ said at a conference he attended in Indonesia today that FTX’s situation was worse than he thought.
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