FTX, Second Largest Crypto Exchange, Files for Bankruptcy as CEO Steps Down
Most recently, it's been in the news that FTX, the world's second-largest crypto exchange, is filing for bankruptcy amid allegations. Many news outlets state that the CEO, Sam Bankman-Fried, was responsible for mismanaging client funds and repurposing deposits into his other company Alameda Research.
Reports surfacing that this chapter 11 bankruptcy by FTX will likely affect about 130 affiliated companies, and over 100,000 creditors will likely lose between $10 to $50 billion. The new interim CEO for FTX, John J. Ray III, shared on Twitter, "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."
Ray also stated that "the FTX Group has valuable assets that can only be effectively administered in an organized, joint process. I want to assure every employee, customer, creditor, contract party, stockholder, investor, governmental authority, and other stakeholder that we will conduct this effort with diligence, thoroughness, and transparency."
Due to this illegal use of funds, Binance's takeover was immediately halted once the firm learned about FTX's actions. FTX, once with a $32 billion evaluation down into the gutter of bankruptcy, and over the following three days, over $6 billion was withdrawn from FTX company accounts.
Binance explained that "as a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations, we have decided that we will not pursue the potential acquisition of FTX.com."
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