The voluntary proceedings involve FTX’s sister company, Alameda Research, as well as about 130 other affiliated companies. The filing caps off a turbulent week for one of the biggest players in the industry.
Sam Bankman-Fried’s cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy in the U.S., according to a media release shared on Twitter. Bankman-Fried has also resigned as CEO; JohnJ. Ray III has taken over, and the outgoing CEO will stay on to help with the transition.
Alameda Research, a cryptocurrency trading company owned by Bankman-Fried, and FTX.us, the company’s U.S. subsidiary, are among the about 130 further connected businesses involved in the proceedings.
FTX lists more than 100,000 creditors, assets between $10 billion and $50 billion, and liabilities between $10 billion and $50 billion in the 23-page bankruptcy filing. Sam Bankman-Fried admitted on Thursday that he “f—ed up” and also stated that he intends to name Stephen Neal the new chairman of the board for the company.
Customers raced to withdraw their money earlier this week as concerns of financial instability at FTX and other companies run by Mr. Bankman-Fried circulated. FTX went from being valued at $32 billion to bankruptcy in a matter of days due to a lack of money.
Bankman-Fried attempted to put together a rescue in an effort to be acquired by Binance, a rival and one of the biggest cryptocurrency exchanges in the world. But after performing corporate due diligence, Binance rescinded its non-binding agreement to buy the company.
“The issues are beyond our control or ability to help,” according to Binance, who had hoped to be able to support FTX’s consumers by offering liquidity. Retail consumers will suffer every time a major player in the market fails, the company said. However, they added that the cryptocurrency ecosystem is becoming more resilient, and it is their opinion that in due course, outliers who misappropriate user funds will be nullified by the free market.