FTX files for Chapter 11 bankruptcy
Crypto exchange FTX has moved to file for Chapter 11 bankruptcy, according to a company statement.
FTX said it is seeking bankruptcy protection in Delaware. In addition to FTX Trading Ltd., the company said more than 100 corporate entities affiliated with FTX, including Alameda Research, are also filing for bankruptcy.
In the announcement, FTX said that CEO Sam Bankman-Fried has resigned. John Ray has been appointed to take the position.
“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,” the statement said.
The move caps a stunning downfall, given FTX’s position in the market and public prominence, as well as that of its senior leadership.
A serious liquidity crisis brought on by revelations about its balance sheet pushed FTX toward insolvency. Binance, which signed a letter of intent that could have led to an acquisition, ultimately passed on the deal, citing due diligence concerns as well as reports of investigations by American regulators.
© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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Author: Michael McSweeney
