FTX files for bankruptcy, CEO resigns. Crypto in distress

FTX files for bankruptcy CEO resigns Crypto in distress

(Finance) – Cryptocurrency Exchange FTX Has Started Procedures To Declare Bankruptcy In The US, So-called Chapter 11. The move comes just days after biggest rival Binance backtracked on its plans to acquire it, following a liquidity crisis due to customer withdrawals, and attempts to raise around $ 9 billion to cover his needs. The CEO Sam Bankman-Fried has resigned from office and was replaced by John J. Ray III, although the outgoing number one will remain to assist in the transition.

“The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess their situation and develop a process to maximize recoveries for stakeholders“Ray said in a company statement posted on Twitter.

“FTX has valuable resources that can only be effectively administered in an organized and joint process – he continued – I want to ensure every employee, customer, creditor, contractor, shareholder, investor, government authority and other interested party that we will conduct this effort with diligence, completeness and transparencyRay stressed that “stakeholders should understand that events have been fast moving and that the new team has only recently been involved.”

The initiation of controlled bankruptcy proceedings is a new earthquake for the world of cryptocurrencies, after the Celsius and Earth-Moon cases had already undermined confidence in crypto-assets and increased the likelihood of greater regulation of the sector. The Bitcoin lost 4% in the last 24 hours and 20% in the last week. Ethereum shows a decline of 5% in the last 24 hours and 24% in the last week.

The situation is worrying even if you look at theimportant list of investors of FTX, which included giants such as Sequoia Capital, BlackRock, Tiger Global Management and SoftBank. Earlier this year, FTX it was valued at $ 32 billion.

(Photo: Kanchanara on Unsplash)