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FTX, a cryptocurrency exchange platform, files for bankruptcy protection in the US

FTX, one of the most prominent cryptocurrency exchange platforms, has been at the center of the crypto world for the last few days. The firm is facing an extreme liquidity crunch. Earlier, FTX Japan and Turkey’s operations were suspended and the platform was only allowed to operate in a “close-only” that allowed it to conclude relations with existing customers. New customers were no longer allowed to sign up for the platform.

Amidst this tumultuous condition, FTX’s founder Sam Bankman-Fried stepped down as the CEO of the company. Several reports have been released that investigated the financial condition of FTX.

The FTX logo (Image via CZ Binance / Twitter)

Following these developments, Sam Bankman-Fried has filed for bankruptcy protection in the US under the chapter 11 proceedings in the state of Delaware. The firms involved in this filing include FTX, FTX US, as well as Alameda Research. Furthermore, approximately 130 more businesses in the FTX group along with related companies and their subsidiaries are also included in these proceedings.

The official reason cited for the filing is: “in order to begin an orderly process to review and monetize assets for the benefit of all global stakeholders”.

Bankman-Fried will be replaced by John J Ray III, an American lawyer, as the chief executive of the company. Previously, John J Ray had overseen the liquidation of Enron, a Texas-based energy company, in 2004.

“I’m piecing together all of the details, but I was shocked to see things unravel the way they did earlier this week. I will, soon, write up a more complete post on the play by play, but I want to make sure that I get it right when I do.”

Sam Bankman-Fried via Twitter

According to some reports, FTX, the crypto firm, has over 100,000 creditors. The company has assets ranging from $10 billion to $50 billion. Also, the liabilities of the company lie somewhere between $10 billion and $50 billion. The company is also among the top crypto exchanges in terms of volume of trade. The total valuation of trades conducted so far in 2022 is $627 billion.

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