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FTX CEO Bankman-Fried Resigns, Bankruptcy Proceedings Begin

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Joyashree Dey Follow

INDIA

Nov, 15 2022

Nov, 15 2022

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On November 11, an FTX official announced in a press release via Twitter that Sam Bankman-Fried would resign from his position as CEO of the FTX Group. Approximately 130 companies under Bankman-Fried’s FTX Group have also initiated voluntary bankruptcy (chapter 11) proceedings, according to the notice. 


Present CEO John J. Ray III said that FTX has “valuable assets that can only be effectively administered in an organized, joint process” and noted that the Chapter 11 proceedings do exclude LedgerX LLC, FTX Digital Markets Ltd, FTX Australia Pty Ltd., and FTX Express Pay Ltd. 


Previously Ray worked as CEO, chief reorganization officer, and other similar roles at different public and private companies, including Enron Corp., Fruit of the Loom, and Nortel Networks. The FTX bankruptcy follows gossipy tidbits about an enormous opening in the organization's balance sheet, for certain evaluations ascending as high as $9 billion. 


Throughout recent weeks, Bankman-Fried’s $32 billion organization imploded in the face of mounting proof that the connection between FTX and Alameda Research, the trading arm he also co-founded, was profoundly undesirable. Regulatory and legal authorities are now investigating that relationship and the charge that FTX loaned customer funds to Alameda, which the latter used to make unsafe bets on crypto. 


Binance moved in the opposite direction from its prior intent to gain FTX, tweeting Wednesday afternoon that it wouldn't seek it after purchasing the organization. The opponent exchange’s decision was “a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations,” according to a Binance statement. 

 

The step down of Bankman-Fried comes after he was sorry for FTX’s breakdown in a Twitter thread Thursday. “I’m sorry. That’s the biggest thing,” he tweeted at the time. “I f**ked up and should have done better.” 


Bankman-Fried added in the Twitter thread that the organization was in conversation with many players as it looked for liquidity. 


FTX’s bankruptcy proceedings are not remarkable for the market this year. Voyager Digital filed for bankruptcy toward the beginning of July, while crypto lender Celsius started bankruptcy proceedings about seven days after in the aftermath of the breakdown of Terra’s algorithmic stablecoin.   


The sole proprietor of FTX US gathered up Voyager Digital assets assessed to be worth more than $1.4 billion at an auction in September. But Voyager said in a statement Thursday that the transaction among FTX and Voyager “has not been culminated.” 


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Joyashree Dey

CBW - External Analyst

INDIA

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