FTX goes bankrupt, its boss SBF quits

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News rolls in and the story of the cryptocurrency industry darkens into a nightmarish affair. Sam Bankman-Fried (better known by his initials SBF), the founder and CEO of FTX has just resigned and filed for bankruptcy of the company.

The request, as singular as it is, also takes into account FTX.US, the American branch of the company, which was until now not affected by the fiasco of the parent company. With them, “130 other affiliated companies of the FTX group have started the voluntary process to assess and monetize the assets”, can we read in a press release. The subsidiary Alameda Research, the source of all the trouble, is also placed in bankruptcy.

What fate for users?

SBF’s replacement is John J Ray III, who declared early this morning in the United States that this procedure “is appropriate to give FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders”. As for the fate of customers, Sam Bankman-Fried just wrote on Twitter that he was going “work to clarify where things stand in terms of recovering funds as soon as possible”.

FTX certainly didn’t really have a choice. An hour before the publication of its press release to inform of its bankruptcy, FTX was pinned down by the Cypriot regulator to suspend its operations as of today. “The Cyprus Securities Commission on Wednesday November 9 requested the Cypriot investment company FTX EU Ltd to suspend its operations and immediately carry out a number of actions for the protection of investors”she wrote.

As a reminder, FTX, the world’s number 2 cryptocurrency exchange platform (behind Binance) has already seen the capitalization of its native cryptocurrency melt by more than 90%, letting billions of dollars evaporate. FTX alone was worth more than $32 billion in the past two weeks.

Big economic concerns at FTX

Coming to bankruptcy, FTX was inundated with rumors about a financial hole of more than 9 billion dollars. That’s even more than Bloomberg estimated. The agency wrote that FTX would need $4 billion today to remain solvent. Yesterday, the media was looking at the proposal of Justin Sun, founder of the Tron blockchain. With him, SBF reportedly exchanged messages to try to find common ground for help.

Two days ago, after trying to buy FTX, it was his competitor Changpeng Zhao, the boss of Binance, who announced his refusal to continue the procedure. At first we hoped to be able to support FTX customers with cash, but the problems are out of control and beyond our ability to help”indicated the number 1 of the cryptos.

Binance had rightly said that the company’s financial situation was unsustainable. “I am sorry. This is the most important thing”tweeted SBF again last night. “I screwed up and I should have done better”he added.



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