November 29, 2022

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FTX files for bankruptcy as CEO Sam Bankman-Fred resigns

FTX files for bankruptcy as CEO Sam Bankman-Fred resigns

“I’m really sorry, again, that we ended up here,” Bankman-Fred said on Twitter on Friday. “We hope this will bring a measure of transparency, trust and governance.”

The bankruptcy filing marks the beginning of what could be months or even years of legal ramifications, as lawyers try to see if the exchange can somehow continue to operate and clients seek damages. FTX is already a target of investigations by the Securities and Exchange Commission and the Department of Justice, as investigators focused on whether the company improperly used client funds to support Alameda Research, a trading company also founded by Mr. Bankman-Fried.

The bankruptcy filing included FTX, its US arm, and Alameda. According to a basic statutory filing in US Bankruptcy Court in Delaware, FTX has assets of between $10 billion and $50 billion, with the size of its liabilities in the same range. The file said that the company has more than 100,000 creditors.

Bankruptcy is a dizzying downfall for 30-year-old Mr. Bankman-Fried, who has built his reputation as a genius boy with a host of endearing quirks, including the habit of sleeping on a bean bag in the office. At one point, he was one of the richest people in the industry, as estimated A fortune of 24 billion dollars. Contract actors, professional athletes, and former world leaders.

Mr. Bankman-Fried’s crypto empire had a complex structure. The bankruptcy filing lists more than 130 corporate entities affiliated with FTX and Alameda. But as of June, FTX only had about 300 employees, a source of pride for Bankman-Fried, who said he has resisted calls from venture investors to hire more staff.

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“We told them that the extra staff that were added too quickly was negative,” Mr. Bankman Fried He said On Twitter in June. “They can take it or leave it.”

Unusually for a major startup, none of the FTX investors had board seats, which led to While that It consists of Mr. Bankman Fried, another FTX executive and attorney in Antigua and Barbuda.

FTX was based in the Bahamas, where Mr. Bankman-Fried and a small circle of CEOs made most of the shots and lived together in a luxury resort. When the company collapsed this week, lower-ranking employees were left confused and shocked, according to people familiar with the matter.