FTX Initiates Bankruptcy Proceedings and CEO Resigns
Following a liquidity crisis and the Binance and FTX fiasco, Sam-Bankman-Frieds company has now initiated US bankruptcy proceedings with the CEO officially resigning.
FTX had been struggling to raise billions of dollars to avoid bankruptcy following a wave of withdrawals and after a potential rescue deal with larger rival Binance fell through within a day.
FTX and its affiliated crypto trading fund Alameda Research, as well as roughly 130 other companies, filed for voluntary Chapter 11 bankruptcy in Delaware on Friday, according to a statement shared via Twitter.
The groups CEO has been named John J Ray III. SBF will reportedly be helping out in order to ensure a smooth transition. The former CEO also indicated that the bankruptcy filing does not have to mean the end of the companies and that he is trying to stay optimistic.
FTX stated in its bankruptcy petition that it has $10 billion to $50 billion in assets, $10 billion to $50 billion in liabilities, and more than 100,000 creditors.
A few investors, including Sequoia and SoftBank, had already written off their FTX investments. SkyBridge Capitals founder, Anthony Scaramucci, said on Friday that the alternative investment firm is working to repurchase its FTX stake.
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