Crypto Exchange FTX Files for Bankruptcy; CEO Resigns

FTX Group, which includes FTX U.S., filed for Chapter 11 bankruptcy following an intense liquidity crisis; CEO Sam Bankman-Fried stepped down.Author:NamciosPublish date:Nov 11, 2022FTX Group, which includes FTX U.S., filed for Chapter 11 bankruptcy following an intense liquidity crisis; CEO Sam Bankman-Fried stepped down.FTX has filed for Chapter 11 bankruptcy.The move includes FTX US, the group’s American subsidiary, which up to yesterday was believed to be solvent and able to keep running despite the international arm’s issues.The company’s official Twitter account posted a press release on Friday morning detailing the decision, which also includes a resignation by CEO Sam Bankman-Fried.SBF had been on the spotlight for a couple of years, amassing great media coverage as he led what became known as the FTX Empire. The name was a reference to the many companies that are part of the FTX umbrella, such as Alameda Research, a quantitative trade firm founded by SBF. Alameda is actually at the center of the problems that led to FTX’s collapse. The industry was shaken by the leak of the trading firm’s balance sheet. This led to one of the largest holders FTX’s native cryptocurrency token, FTT, announcing that they would be selling their position. SBF responded in a now-deleted tweet that FTX was fine and assets were also held by the company. However, a deal was struck between Binance and FTX, with SBF eventually conceding to a liquidity crunch. The bailout was a positive development for the industry. CZ made it clear that Binance could withdraw from the deal at any time. Notably, the company had yet to perform due diligence by analyzing FTX’s financial books in order to decide whether to move forward with the acquisition.After reviewing the financial condition of FTX, Binance officially decided to not purchase the non-U.S. business operations of FTX.In addition to the liquidity issues, the revelations made this week led to several U.S. regulators opening investigations into FTX, while others broadened their probes.It’s uncertain how long FTX customers will have to wait to get their bitcoin funds back, or whether that will ever fully happen.Tagsterms:BankruptcyUSFTXSam Bankman-Fried

 

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