FTX files for bankruptcy as CEO resigns

FTX, a cryptocurrency exchange platform, has filed for bankruptcy amid its liquidity crisis.

In a statement shared on Twitter on Friday, the company said Sam Bankman-Fried has resigned from his position as chief executive officer (CEO) of FTX and will be succeeded by John Ray III.

It, however, added that Bankman-Fried “will remain to assist in an orderly transition”.

The development comes after Binance backed out of a deal to acquire FTX after a review of the company’s finances.

According to the statement, FTX Group, which includes the FTX.com entity as well as FTX US, Alameda Research, and approximately 130 additional affiliated firms have commenced voluntary “chapter 11 proceedings”.

Chapter 11 is a form of bankruptcy that involves a reorganisation of a debtor’s business affairs, debts, and assets, and for that reason is known as “reorganisation” bankruptcy.

It allows a company to stay in business and restructure its obligations.

“The immediate relief of chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximise recoveries for stakeholders,” John Ray III, the company’s new CEO, said in the statement.

“The FTX Group has valuable assets that can only be effectively administered in an organised, joint process.

“I want to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority, and other stakeholders, that we are going to conduct this effort with diligence, thoroughness and transparency.”

Press Release pic.twitter.com/rgxq3QSBqm

Advertisement

— FTX (@FTX_Official) November 11, 2022

Ray said that stakeholders should understand that events have been fast-moving and the new team was only engaged recently.

He also told stakeholders to review the materials filed on the docket of the proceedings over the coming days for more information.

The statement added that specific FTX-related subsidiaries including Ledgerx, FTX Digital Markets, FTX Australia, and FTX Express Pay, were excluded from bankruptcy proceedings.

Bankman-Fried also apologised to investors and customers in a series of tweets, adding that he remains optimistic about the company’s future.

1) Hi all:

Today, I filed FTX, FTX US, and Alameda for voluntary Chapter 11 proceedings in the US.

Advertisement

— SBF (@SBF_FTX) November 11, 2022

On Friday, checks by TheCable showed that the prices of Bitcoin have dropped more than 4.6 percent to $16,775. Etherum price have also declined by 5.9 percent to $1, 247, according to data obtained from coinmarketcap.com.