Sam Bankman-Fried has resigned as FTX's CEO, following the crypto exchange filing for bankruptcy. The rapid collapse of the crypto CEO's net worth just shows how quickly one can go from billionaire to bankrupt. FTX filed for Chapter 11 bankruptcy protection, as mentioned in Engadget, which allows for reorganization.
The bankruptcy filing includes FTX Trading, FTX US, Alameda Research, and 130 other companies that fall under the FTX Group. Others managed to stay afloat, like FTX Australia and FTX Express Pay. With Chapter 11 Bankruptcy protection, FTX will be able to keep its head above water, just enough so it could pay back its creditors.
FTX Press Release
In a tweet, it stated that the FTX Group commenced Chapter 11 proceedings voluntarily, in order to review and monetize assets for its global stakeholders. As Bankman-Fried resigned, John J. Ray III took his place as the CEO of the FTX Group. Although, it was also stated the former CEO will still assist in an orderly transition.
A lot of the employees from the FTX Group ranging from different countries, are expected to assist the new CEO. This also goes for independent professionals, which will participate in the operations for the Chapter 11 proceedings. The press release expressed that the group still has valuable assets, which can only be administered in an organized and joint process.
As for the stakeholders, it has been said that the events have been moving fast, and a new team has been engaged. The FTX Group assured that they are conducting the effort with diligence, thoroughness, and transparency. This goes for employees, customers, creditors, contract parties, stockholders, investors, and governmental authorities.
Press Release pic.twitter.com/rgxq3QSBqm
— FTX (@FTX_Official) November 11, 2022
Before the Filing for Bankruptcy
Reports before the bankruptcy, show that Bankman-Fried lost 94% of his net worth in one day. It went from $15.6 billion to just $1 billion. Although that is still a huge amount, it's still a far cry from his previous net worth. All this stemmed from the downfall of the FTX cryptocurrency, as mentioned in Futurism.
Changpeng Zhao, the CEO of Binance, signed a non-binding deal to acquire FTX. It was an effort made in hopes of saving it, but Binance realized that the issues were beyond their control, and ability to help.
However, other reports stated that Binance backed out due to FTX mishandling funds, and being involved in an alleged US agency investigation. It proved to be detrimental to FTX when Binance sold its holding in FTT, which was FTX's native token. The token went from $25 to $3.50 in just a week. Further withdrawal requests pulled the crypto firm down and ended up needing emergency funding.
There were rumors circulating that the Binance CEO was behind the collapse of FTX, but Zhao denied this. He even added that this fall of the crypto firm was bad for anyone in the industry. Zhao also told his employees that this was not a win for their firm.
