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FTX Files for Bankruptcy Protections in US

Nikhilesh De - CoinDesk
2022-11-11 14:18
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Crypto exchange FTX filed for bankruptcy in the U.S., the company announced Friday.

CEO and founder Sam Bankman-Fried also resigned his role, but will "assist in an orderly transition." John Ray III is the new CEO.

FTX Group, which includes the FTX.com entity as well as FTX US, Alameda Research and “approximately 130 additional affiliated companies” have all filed for chapter 11 bankruptcy proceedings, according to a press release.

FTX Digital Markets, FTX Australia, FTX Expess Pay and LedgerX (which does business as FTX US Derivatives) are not included, the release said.

“The FTX Group has valuable assets that can only be effectively administered in an organized, joint process,” Ray said in a statement. “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.”

Events have been “fast-moving” and the new team in place only just began, he said.

Bitcoin’s price immediately fell over $1,000 on news of the bankruptcy, dropping to $16,500 within minutes.

Bankman-Fried announced FTX had “liquidity” issues earlier this week, first saying Binance had agreed to acquire the company before Binance pulled out and later announcing a deal with Tron’s Justin Sun to backstop TRX-based tokens. The status of this deal was unclear at press time.

FTX paused withdrawals, though FTX US withdrawals remained unaffected. FTX reopened withdrawals in the Bahamas at regulators’ urging and began announcing certain other jurisdictions had begun some partial withdrawals over the last several hours.

Bankruptcy documents were not immediately available in the federal court database PACER.

UPDATE (Nov. 11, 2022, 13:35 UTC): Adds additional context. This story is developing and will be updated.

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