According to a tweet from the company, Sam Bankman-Fried’s crypto exchange FTX has applied for Chapter 11 bankruptcy protection in the United States. Bankman-Fried has also resigned as CEO; John J. Ray III has taken over, and the outgoing CEO will continue on to help with the transition.
A total of 130 further linked companies are involved in the proceedings, including FTX.us, the corporation’s U.S. subsidiary, and Alameda Research, Bankman-cryptocurrency Fried’s trading company.
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 file that CNBC was able to get. Lehman had assets worth over $600 billion, while Enron had assets worth $60 billion.
Additionally, Bankman-Fried stated that he intends to name Stephen Neal the new chairman of the board for the company. Neal has chosen not to serve, a spokeswoman later stated. Despite being touched by the request, it transpires that he cannot fill the position due to circumstances unrelated to FTX., Inc. or its former CEO.
Adam Landis, the founding partner of Landis Rath & Cobb LLP, who initiated the Chapter 11 procedures on behalf of FTX, was contacted by CNBC. CNBC did not respond to our request for comment right away.
The new FTX Group CEO, Ray, declared that “the immediate relief of Chapter 11 is appropriate to give the FTX Group the time to examine its circumstances and design a plan to maximize recoveries for stakeholders.”
“The FTX Group has valuable assets that can only be managed efficiently through a planned, collaborative process. We will handle this work with diligence, thoroughness, and transparency, I want to assure every employee, customer, creditor, contract party, stockholder, investor, governmental authority, and any stakeholder, Ray continued.
Stakeholders should be aware that things have moved quickly, that the new team has only recently been brought on board, and that they should check the documents put on the proceedings docket over the next few days for more details.
For one of the largest names in the industry, it brings to an end a turbulent week.
As liquidity dried up, users requested withdrawals, and rival exchange Binance pulled up its non-binding agreement to buy the company, FTX plummeted from a $32 billion valuation to insolvency in a matter of days. Bankman-Fried, the creator of FTX, said on Thursday that he “f—-ed up.”
SkyBridge Capital founder and former Trump communications director Anthony Scaramucci traveled to the Bahamas this week to assist Bankman-Fried as an investor and friend. According to Scaramucci, it seemed beyond the scope of a straightforward liquidity rescue when he arrived. When he and other investors initially assessed FTX as a potential business partner, he said there was no proof of this mistreatment.
On Friday morning’s “Squawk Box” on CNBC, Scaramucci remarked, “Duped I think is the correct term, but I am very unhappy because I do like Sam.” “I was not an insider at FTX, therefore I don’t know what happened.”
When CNBC asked an FTX representative for comment on this story, including on Scaramucci’s comments, they did not react right away.
FTX quickly grew to include areas of life other than cryptocurrencies, such pop culture. For instance, during the previous Super Bowl, a commercial featuring comedian Larry David was broadcast, in which David declined the chance to invest in cryptocurrencies. “I don’t think so, ehh. And I’ve never been mistaken about any of this. Never.”
FTX and GameStop are ending their collaboration, according to persons with knowledge of the situation. According to the terms of the deal, which was made public in September, GameStop promoted FTX on its exchange while also selling gift cards for it in a few of its locations.
Following the FTX bankruptcy filing, the termination of business contracts, including the one with GameStop, is probably going to continue.
LedgerX LLC, FTX Digital Markets Ltd., FTX Australia Pty Ltd., and FTX Express Pay Ltd. are not included in the Chapter 11 proceedings.
SOURCE: CNBC
