FTX Files for Bankruptcy & CEO SBF Resigns
FTX was the 3rd largest crypto exchange until last month. On 11th November FTX filed for bankruptcy in the US. Former Enron turnaround expert John J. Ray III has been named as the new CEO of FTX. Sam Bankman-Fried, the company’s founding CEO has resigned from his position.
FTX Filed for Bankruptcy with other 130 affiliated companies:
According to a statement from FTX, about 130 more associated firms, including FTX US and Alameda Research, have also started the bankruptcy process. It said that FTX Australia, FTX Express Pay, and the exchange’s Bahamian subsidiary, FTX Digital Markets, as well as its U.S. options platform LedgerX, are not parties to the actions.
Further, John J.Ray III – the new CEO of FTX stated that, “The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders”.
This announcement follows the FTX’s week-long collapse as it sought acquisitions and new funding from market players in an effort to stay afloat.
The biggest cryptocurrency exchange in the world, Binance, signed a letter of intent to buy FTX on 8th November. After examining FTX’s organizational structure and financial records, Binance withdrew from the proposal a little more than 24 hours later.
“Our hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help” Binance.
“As a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged U.S. agency investigations, we have decided that we will not pursue the potential acquisition of FTX”Binance
In a series of tweets on Thursday, Bankman-Fried stated that FTX International was attempting to improve liquidity. And was in discussions with “a number of players.” He continued by saying that all proceeds and current collateral “will go straight to users.”
According to statistics from CoinMarketCap, FTX has dropped from third to 62nd place among cryptocurrency exchanges. Also, FTX US division is ranked 54th. Kraken is now the third-largest cryptocurrency exchange after Coinbase and Binance.
“The FTX Group has valuable assets that can only be effectively administered in an organized, joint process. I want to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency”John J. Ray III
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