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November 14, 2022

Crypto exchange FTX files for bankruptcy; CEO quits

Cryptocurrency exchange FTX Group, along with its affiliates, has filed for bankruptcy protection in the US to enhance recoveries for its stakeholders across the globe.  

According to the company, nearly 130 affiliated companies, including West Realm Shires Services and Alameda Research, have initiated voluntary proceedings under Chapter 11 of the US Bankruptcy Code. 

The move seeks commencement of “orderly process to review and monetise assets for the benefit of stakeholders”. 

FTX had nearly 100,000 creditors, assets between $10bn and $50bn, and over $10b-$50bn in liabilities, reported CNBC citing the 23-page bankruptcy filing.

Concerns for FTX began after crypto exchange Binance dropped a proposed rescue deal this week. 

FTX also struggled to raise billions to avoid a collapse as traders reportedly moved to withdraw $6bn from the platform.

The announcement comes amid the resignation of FTX chief executive Sam Bankman-Fried. 

In a series of tweets, Bankman-Fried said: “I’m really sorry, again, that we ended up here. Hopefully things can find a way to recover.  Hopefully this can bring some amount of transparency, trust, and governance to them.” 

Following his exit, the company named John J Ray III as its new CEO.

Hours after FTX filed for bankruptcy in the US, Cyprus Securities and Exchange Commission reportedly suspended its licence to operate an investment business in Europe.  

Meanwhile, Visa announced that it has terminate its global credit card agreements with FTX, reported Reuters.

The news agency quoted a Visa spokesperson as saying: “The situation with FTX is unfortunate and we are monitoring developments closely.

“We have terminated our global agreements with FTX and their US debit card programme is being wound down by their issuer.”

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