Cryptocurrency trading company FTX is formally seeking protection from its creditors and entered bankruptcy proceedings. The company's founder, chair and CEO, Sam Bankman-Fried, has also resigned, the company announced.
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SBF Resigns and FTX Files for Bankruptcy
CBC News | Peter Evans | Nov 11, 2022
Cryptocurrency trading company FTX is formally seeking protection from its creditors and entered bankruptcy proceedings. The company's founder, chair and CEO, Sam Bankman-Fried, has also resigned, the company announced.
- Bankrupt: About 130 other companies associated with FTX, including Bankman-Fried's investment firm Alameda Research, have also commenced voluntary proceedings under Chapter 11 of the U.S. bankruptcy code," the company said.
- Gone from one of the largest cryptocurrency trading platforms in the world with $16 billion in assets, to insolvency, frozen customers accounts, regulatory and judicial investigations and rumblings of fraud.
See: Binance vs. FTX: Clash of the Titans | CZ Selling FTT Tokens | The Story of SBF’s Backroom Binance Deal and Lessons Learned | Binance Drops Bid to Save Rival | Developing…
- Smoke and mirrors: About a year ago, one FTT token was worth about $80 US. On Monday morning, each one was worth about $22. By Friday morning, they were changing hands for less than $3.
- That's a major red flag, says Charley Cooper, a former chief operating officer with commodity regulator the CFTC, because it means the company is "valuing itself based on something that they invented. The first problem is much of their balance sheet was in the very token they created, which no one really knew how much it was valued at," he said.
- The 30-year-old Bankman-Fried was born in Silicon Valley and lives in the Bahamas, but his crypto empire stretched all the way to Canada. The Ontario Teachers' Pension Plan participated in a funding round for FTX as recently as 2021, with a stake of roughly $95 million.
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