SBF Resigns as FTX Officially Files for Bankruptcy
Sam Bankman-Fried’s crypto empire has officially filed for voluntary Chapter 11 bankruptcy protection, putting the company on a list of crypto entities that have become insolvent within the last six amid the bear market.
The filing was submitted to the United States bankruptcy court in the District of Delaware. The proceedings will give FTX, Alameda Research, and about 130 subsidiaries some breathing space while FTX restructures and develops a plan to settle its creditors.
SBF Resigns as CEO
According to the official announcement, FTX CEO Sam Bankman-Fried (SBF) has resigned from his position at the company. John J. Ray III immediately replaced SBF as FTX’s chief executive.
“The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximise recoveries for stakeholders,” Ray said.
The news comes less than a week after FTX ran into financial troubles, with reports suggesting that the exchange could be owing as much as $8 billion. The company then suspended withdrawals and other services on Tuesday due to its liquidity issues.
Yesterday, SBF apologised while noting some of the mistakes he made that resulted in the downfall of FTX. He vowed to do everything possible to make users whole. The FTX boss also stated that his team was looking to raise funds from investors and rival companies, including Justin Sun and OKX exchange.
Bahamas Regulator Freezes FTX’s Assets
Shortly after, on-chain data showed that the exchange had started processing withdrawals. However, further investigation revealed that the withdrawals were linked to accounts in the Bahamas because of the country’s regulations.
According to reports from Reuters earlier today, the Bahamas Securities Commission has frozen some assets belonging to FTX Digital Markets, a subsidiary of FTX registered in the Bahamas.
Meanwhile, FTX’s bankruptcy filing is the biggest since crypto firms started going underwater after the Terra LUNA crash in May.
~ By William A. Frederick ~
