Sam Bankman-Fried resigns as FTX CEO and his crypto exchange files for bankruptcy
We're still talking about FTX and its CEO, Sam Bankman-Fried, because the world's second-largest crypto empire keeps falling deeper and deeper into a hole.
We're still talking about FTX and its CEO, Sam Bankman-Fried, because the world's second-largest crypto empire keeps falling deeper and deeper into a hole. FTX made headlines last week with news of a buyout by its rival Binance to get it out of liquidity problems. Still, Binance walked away from the deal when it learned of the seriousness of FTX's problems. Bankman-Fried said he'd shut down his crypto hedge fund Alameda Research and could file for bankruptcy if there was no bailout for the exchange's US$80 billion shortfall. The once US$32 billion exchange crashed as FTX's token plunged with the bad news. Because of the ongoing saga, the exchange's customers are also panicking.
On Friday, Bankman-Fried resigned as CEO, and FTX filed for bankruptcy. Around 130 other sister companies, including FTX US and Alameda Research, are also named in the filing. FTX said in the filing it has more than 100,000 creditors and between US$10-$50 billion of estimated liabilities and assets.. It's probably the biggest bankruptcy in the US this year.
So what about FTX's customers? They're in complete panic mode about their money, but there's nothing they can really do about it. It's unclear if they'll get any of their money back. Police in the Bahamas are also looking into a criminal probe over the situation.
"The company and Sam Bankman-Fried seemed trustworthy," said Justin Zhang, a 34-year-old engineer in Los Angeles. "I thought FTX US was different because of all the regulations put in place, but it's not."
"I'm done and I think a lot of retail traders are done," said Christ Keuchkerian, a 36-year-old FTX.com customer in Quebec who works in IT and hadn't been able to withdraw his funds. "I don't think at this point I want to put any more money into this … If I've learned anything, it's that centralized exchanges are dead. The philosophy behind this movement was great, but the execution has been horrible. The people running the exchanges have been horrible."
"Following the Chapter 11 bankruptcy filings - FTX US and FTX [dot] com initiated precautionary steps to move all digital assets to cold storage. Process was expedited this evening - to mitigate damage upon observing unauthorized transactions," tweeted Ryne Miller, general counsel of FTX US.