- What Makes the FTX File for Bankruptcy?
- FTX is linked to more than 120 companies, most of which are on the verge of filing for bankruptcy.
FTX was founded in the Bahamas by Sam Bankman-Fried in 2019, and it took two years for FTX to get famous in the crypto sector.
The founder of FTX was listed as the youngest billionaire on the billionaire list of Forbes, and many financial experts predicted that Sam would become as rich as Warren Buffett.
Earlier, FTT, the native token of FTX, was trading at impressive prices following the bullish direction, but as soon as one of the investors and competitive crypto exchange dumped aggressively resulting in FTT fell more than 90% in a matter of seven days.
Sequoia Capital revealed its stakes of $210 million in FTX, which was automatically converted to $0.
In a public notice, Sequoia Capital noted, “We are in the risky business field,” and ” Some investments will surprise to the upside and some to the downside.”
After FTT dumping, the prices came down to $2.80, and after witnessing this incident, financial regulators of the Bahamas froze all the assets of FTX in the nation.
Sam himself informed about the bankruptcy process of FTX on 11 November 2022, and on the same day, Bankman also announced his resignation from FTX.
According to WSJ, on 18 November 2022, the three most trusted and reliable deputies of Sam Bankman Fried were fired from FTX, the crypto exchange.
Caroline Ellison, Nishad Singh and co-founder and Chief Technology Officer of FTX Gary Wang were running a trading company Almeda Research. They were using users’ funds for FTX personal investment in several sectors.
The misappropriation of users’ funds came into the limelight when officials and executives from both FTX and Alameda spoke and noted that FTX had loaned billions of funds to Alameda.
John J. Ray is fulfilling the position of Chief Executive Officer of FTX; John is famous for his remarkable restructuring works. Earlier, he worked with Enron Corp. to restructure the firm.
On a video call with The Journal on 9 November 2022, Caroline Ellison noted that Sam and his top deputies were aware of users’ money transferred from FTX to Almeda Research.
According to one report, more than 120 companies were linked to FTX, and some are on the verge of filing for possible bankruptcy. The total valuation of FTX was $32 billion, and some reports assure that a huge gap of $10 billion is seen in FTX’s balance sheet.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
Source: https://www.thecoinrepublic.com/2022/11/19/bankrupt-ftx-fires-three-of-sam-bankman-frieds-favorite-deputies/