FTX: Major crypto exchange goes bankrupt as bitcoin price collapses
Crypto exchange FTX has gone bankrupt and its high-profile chief executive Sam Bankman-Fried has resigned amid major troubles at the company.
The news sent the price of cryptocurrencies plunging. Bitcoin, the largest digital currency, fell almost 3 per cent in the wake of the announcement – leaving it down more than 20 per cent over the last week.
Mr Bankman-Fried and his company, FTX, had been among the chief promoters of cryptocurrencies as they rapidly grew in recent months and years. His success brought him appearances alongside some of the world’s most powerful people, relationships with celebrities and a vast personal fortune.
But in recent days a news report from crypto website Coindesk detailing a relationship between FTX and another company run by Mr Bankman-Fried, Alameda Research. In the wake of that article, the chief executive of fellow crypto company Binance said it would be selling its holdings of FTT, FTX’s own cryptocurrency.
Changpeng Zhao, Binance’s chief executive, said he had made the decision to sell because of “recent revelations that came to light”.
That brought about chaos at FTX, which at various points in recent days has been unable to process withdrawals. It also led to personal issues for Mr Bankman-Fried, whose vast net wealth fell 90 per cent in hours.
Now the company says it will begin Chapter 11 proceedings, indicating that it is bankrupt. Mr Bankman-Fried will also resign at its chief executive, being replaced by John J Ray III.
Mr Ray said that the bankruptcy proceedings would allow FTX to “assess its situation and develop a process to maximise recoveries for stakeholders”.
