FTX founder Sam Bankman-Fried is stepping down as CEO, as his cryptocurrency exchange is applying for Chapter 11 bankruptcy in the US
FTX Files for Bankruptcy. Source: unsplash.com
In a press release, the beleaguered crypto exchange FTX notified all of its 1.2 million users about the bankruptcy filing. In addition, its founder and CEO Sam Bankman-Fried announced his resignation. He is being replaced by John J Ray.
About 130 affiliated companies – including FTX US and Alameda Research – are also voluntarily filing for Chapter 11 bankruptcy. However, subsidiary options platform Ledger X, Bahamian unit FTX Digital Markets, FTX Australia and FTX Express Pay are not included in bankruptcy proceedings.
Facing a liquidity crunch, Bankman-Fried has reportedly addressed many investors to find a rescue package. However, the sum was too big. By rough estimations, the exchange needed about $8-9 billion in liquidity. Moreover, the prospective takeover deal with rival Binance fell through, revealing a massive financial black hole.
Regulators from different corners of the world also enhanced their scrutiny over FTX. Thus, the SEC and CFTC are both investigating FTX operations in the US. Meanwhile, European regulators will have FTX Europe’s licence suspended. In addition, FTX Japan was also ordered to suspend its operations.
SEE ALSO:
Binance Reconsidered FTX Takeover: Discovered a Financial Black Hole
Crypto Volatility De-pegged Stablecoins, Urges for Legislation
