In the words of John Ray III, “The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders.”
The curtains have finally come down on the FTX liquidity crisis as the exchange has filed for Chapter 11 bankruptcy in Delaware’s Federal Court, with Sam Bankman-Fried stepping down as its CEO.
This marks one of the biggest collapses in the crypto industry since Celsius declared insolvency in July.
Press Release pic.twitter.com/rgxq3QSBqm
— FTX (@FTX_Official) November 11, 2022
As per FTX’s press release, John J. Ray III was appointed as the CEO of FTX. Ray, who has previously overseen Enron’s bankruptcy process, will now be responsible for managing FTX’s operations in Sam Bankman’s stead.
Meanwhile, Sam will remain with FTX to assist in its “orderly transition.”
John Ray III added,
"The FTX Group has valuable assets that can only be effectively administered in an organized, joint process."
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Besides FTX International, a total of 130 subsidiary firms, including FTX US, Alameda Research, and West Realm Shires, have also initiated their bankruptcy proceedings.
In fact, the filings for Alameda Research alone account for $10B to $50B worth of liabilities from over 100K creditors.
Currently, FTX International has suspended all withdrawals. FTX US has advised users to move their assets off the platform as it may soon halt trading services.
2) I'm really sorry, again, that we ended up here.
— SBF (@SBF_FTX) November 11, 2022
Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them.
Ultimately hopefully it can be better for customers.
Sam Bankman tweeted that although FTX has filed for bankruptcy, the exchange may still be able to provide funds to its user base.
