Sam Bankman-Fried steps down, FTX files for bankruptcy

Sam Bankman-Fried, founder and chief executive officer of Cryptocurrency Derivatives Exchange FTX, during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, U.S., on Wednesday, Jan. August 17, 2022.

Jeenah Moon | Bloomberg | beautiful pictures

Sam Bankman-Fried’s crypto exchange FTX has filed for Chapter 11 bankruptcy in the US, according to a report. company statement posted on Twitter. Bankman-Fried also stepped down as CEO and was replaced by John J. Ray III, although the outgoing head will continue to assist with the transition.

Some 130 additional affiliated companies are part of the proceedings, including Alameda Research, Bankman-Fried’s cryptocurrency trading arm, and, the company’s US subsidiary.

In its 23-page bankruptcy filing obtained by CNBC, FTX indicates that it has more than 100,000 creditors, assets between $10 billion and $50 billion, as well as liabilities between $10 billion and $50 billion. Bankman-Fried also said he wants to appoint Stephen Neal as the company’s new chairman of the board.

“The immediate Chapter 11 mitigation is appropriate to provide FTX Group with the opportunity to assess its situation and develop a process to maximize resilience for stakeholders,” said New Director of FTX, Ray said.

“FTX Group has valuable assets that can only be effectively managed in a common, organized process. I want to make sure every employee, customer, creditor, contract, shareholder, investor, etc. , government agencies and other stakeholders that we will proceed with this Ray continued.

He added that stakeholders should understand that events are moving fast and that the team has only recently joined, and they should review the documents submitted in the procedural framework in the coming days for more information. .

It marks a tumultuous week for one of the biggest names in the industry.

In the span of a few days, FTX went from a $32 billion valuation to bankruptcy as liquidity dried up, customers demanded withdrawals, and rival exchange Binance went bankrupt. non-binding agreement to buy the company. FTX Founder Sam Bankman-Fried admit on Thursday that he’s “f — ed up.”

Anthony Scaramucci, founder of SkyBridge Capital and short-time chief communications officer for Trump, flew to the Bahamas this week to help Bankman-Fried as an investor and a friend. When it got there, he said, it appeared beyond the reach of a simple liquidity rescue. He said he saw no evidence of this mishandling when he and other investors first looked at FTX as a potential business partner.

Scaramucci said: “Duplicate, I guess the right word, but I am very disappointed because I like Sam.” CNBC’s Squaw Box Friday morning. “I don’t know what happened because I’m not an insider at FTX.”

Chapter 11 proceedings exclude the following subsidiaries: LedgerX LLC, FTX Digital Markets Ltd., FTX Australia Pty Ltd. and FTX Express Pay Ltd.

This is a breaking news story. Please check back for updates.

CNBC’s Jack Stebbins and Lillian Rizzo contributed to this report.

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