Sam Bankman-Fried cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy in the U.S. based on statements circulating on Twitter. At the same time, Bankman-Fried also resigned as CEO and was replaced by John J. Ray III. J. Ray III will take on the task of helping the future process go more smoothly.
Alameda Research and approximately 130 additional affiliated companies are parties to the proceedings.
According to the new chief executive officer, Ray, the Chapter 11 bankruptcy filing is appropriate to give the FTX Group an opportunity to assess its situation and develop a process to maximize recovery for stakeholders.
“The FTX Group has valuable assets that can only be managed effectively in an organized joint process. I want to assure every employee, customer, creditor, contractor, shareholder, investor, government authority and other stakeholders that we will conduct this endeavor diligently, thoroughly and transparently,” continued Ray.
He added that stakeholders should understand that FTX is moving quickly to restore the situation, coupled with the addition of new teams.
Within days, FTX went from a $32 billion valuation to bankruptcy as liquidity dried up, customers demanded withdrawals, and rival exchange Binance was not interested in acquiring it.
Anthony Scaramucci, founder of SkyBridge Capital and Trump's short-term communications director, flew to the Bahamas this week to help Bankman-Fried as an investor and friend. When he got there, he said, it seemed beyond the point of easy liquidity rescue. He said he saw no evidence of this mishandling in an outsider's view.
