Crypto exchange FTX signs for bankruptcy, CEO Sam Bankman-Fried resigns

The beleaguered crypto exchange FTX on Friday announced it has filed for Chapter 11 bankruptcy in the US, as its Founder and CEO Sam Bankman-Fried resigned from his role.

John J Ray III has been appointed the new CEO and nearly 130 additional affiliated companies — including FTX US and Alameda Research — have also begun the bankruptcy process, the company said in a statement.

The move is “in order to begin an orderly process to review and monetise assets for the benefit of all global stakeholders,” said FTX.

“Many employees of the FTX Group in various countries are expected to continue with the FTX Group and assist Mr. Ray and independent professionals in its operations during the Chapter 11 proceedings,” said the crypto exchange.

Earlier, world’s largest crypto exchange Binance took a U-turn on acquiring FTX, saying it was backing out of the deal after reviewing the company’s finances, leading to further fall in major cryptocurrencies.

Binance earlier this week signed a non-binding, letter of intent to purchase FTX for an undisclosed sum.

“The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders,” said Ray.

“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 stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency,” he explained.

On Thursday, Bankman-Fried said in a series of tweets that FTX International was looking to raise liquidity and was in talks with a “number of players.”

FTX has fallen from being the third largest crypto exchange to 62nd, according to CoinMarketCap.

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