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Economy & Business

FTX, a cryptocurrency exchange, declares bankruptcy, and CEO Sam Bankman-Fried resigns

The Hawk
November12/ 2022

San Francisco (The Hawk): Following its collapse this week, the cryptocurrency exchange FTX has applied for bankruptcy protection, and its former billionaire CEO Sam Bankman-Fried has resigned. This is a disaster for the business, which was only months ago valued at $32 billion.

After clients hurried to remove their assets from the company, Bankman-Fried sought billions of dollars to save it, but FTX collapsed a week later.

To alleviate a financial shortage, Bankman-Fried had requested $6 billion to $8 billion.

The 30-year-old apologised for the crisis on Thursday, saying, "I fucked up, and could have done better."

According to a statement released by FTX on Friday, Bankman-Fried will "stay to assist in an orderly transition."

Days after its rival Binance backed out of a planned deal, the announcements were made.

The Department of Justice and the Securities and Exchange Commission are looking into FTX and its CEO and founder Sam Bankman-Fried to see if any criminal behaviour or securities charges were committed, according to the Associated Press.

The focus of the investigation is whether the company utilised customer money to finance wagers at Bankman-hedge Fried's fund, Alameda Research.

After undergoing the cryptocurrency equivalent of a bank run, FTX decided earlier this week to sell itself to larger rival Binance.

The cryptocurrency community had hoped that Binance, the biggest cryptocurrency exchange in the world, could be able to save FTX and its depositors. But after Binance got an opportunity to examine FTX's books, it was obvious that the issues facing the smaller exchange were insurmountable.

(Inputs from Agencies)