Sam Bankman-Fried, founder and CEO of FTX Cryptocurrency Derivatives Exchange, during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, U.S., Wednesday, Aug. 17, 2022.
Jeenah Moon | Bloomberg | Getty Images
Sam Bankman-Fried̵[ads1]7;s cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy in the US, according to a the company’s statement posted on Twitter. Bankman-Fried has also stepped down as CEO and has been replaced by John J. Ray III, although the outgoing CEO will stay on to assist with the transition.
Alameda Research and approximately 130 other affiliates are part of the voluntary process.
“The immediate relief of Chapter 11 is appropriate to give FTX Group the opportunity to assess the situation and develop a process to maximize the recovery for stakeholders,” said the new FTX CEO, Ray.
“FTX Group has valuable assets that can only be effectively managed in an organized, joint process. I want to assure every employee, customer, creditor, contract party, shareholder, investor, government authority and other stakeholders that we will carry out this effort with diligence, thoroughness and openness,” Ray continued.
He added that stakeholders should understand that events have been moving quickly and that the new team has only recently been engaged, and that they should review the material filed on the docket in the coming days for more information.
It ends a turbulent week for one of the biggest names in the sector.
Within days, FTX went from a $32 billion valuation to bankruptcy as liquidity dried up, customers demanded withdrawals, and rival exchange Binance tore up its non-binding agreement to buy the company. FTX founder Sam Bankman-Fried admitted on Thursday that he “f—ed up”.
Anthony Scaramucci, the founder of SkyBridge Capital and a short-term communications director for Trump, flew to the Bahamas this week to help Bankman-Fried as an investor and friend. When he got there, he says, it seemed beyond the point of a simple liquidity rescue. He said he saw no evidence of this mishandling when he and other investors first investigated FTX as a potential business partner.
“Dupert is the right word, but I’m very disappointed because I like Sam,” Scaramucci said on CNBC’s Squawk Box Friday morning. “I don’t know what happened because I wasn’t an insider at FTX.”
The Chapter 11 processing excludes the following subsidiaries: LedgerX LLC, FTX Digital Markets Ltd., FTX Australia Pty Ltd. and FTX Express Pay Ltd.
This is news. Please check back for updates.
— CNBC’s Jack Stebbins contributed to this report.