FTX Files for Ch. 11 Bankruptcy / SBF Resigns As CEO

The sad failure of one of the top cryptocurrency trading platforms around the globe has reached a boiling point today. As a result of FTX filing for bankruptcy in the United States, CEO Sam Bankman-Fried has decided to step down from his position. It would appear that problems started occurring earlier last week when liquidity challenges were a potential danger to the platform. The company FTX has officially filed for bankruptcy, which led to the departure of its chief executive and the disclosure of news about the misappropriation of client funds and failed takeover deals.

Related: The Downfall of FTX

FTX Announces Bankruptcy Process

The narrative is still developing, as seen by FTX’s recent release of an official statement addressing the processes of the bankruptcy. In addition, according to the release, John J. Ray III has been given the position of CEO, and SBF will continue to retain some personnel to aid with an immediate end. The fall from grace, one of the most noteworthy events in the history of the cryptocurrency industry, was when Sam Bankman-Fried and FTX took place. There is no example to indicate how the company might make a comeback after having earned a trustworthy reputation in the cryptocurrency trading industry.

There has been a rumour circulating since the beginning of the week that Bankman-Fried is looking for a rescue package for FTX that is greater than 9 billion USD. Following this, it has been claimed that a group of potential investors has been having conversations; however, there has yet to be any progress made publicly regarding a sale. What the future holds for FTX and its now-departed CEO can only be determined by the passage of time at this point.

In a press statement, FTX Group, which contains the company known as FTX.com as well as FTX US, Alameda Research, and “roughly 130 more connected firms,” have almost all declared bankruptcy under Chapter 11 proceedings. In contrast to chapter 7 bankruptcy processes, which only include the liquidation of assets, chapter 11 bankruptcy proceedings are initiated when the firm has the hope or expectation that it will be able to reorganize its operations. Companies that choose to file for bankruptcy under Chapter 11 are permitted to keep running their day-to-day businesses.

Five Companies Expected to be Hurt by FTX Bankruptcy

1- BlockFi – Debt Financing

2- LayerZero – Extended Series

3- Yuga Labs – Seed

4- Nova Labs – Series D

5- Circle – Unknown