- Sam Bankman-Fried has officially stepped down as FTX CEO.
- The company has filed for Chapter 11 for bankruptcy.
- New CEO will restructure the company.
FTX Requires Restructuring
The unexpected collapse of SBF-backed FTX crypto exchange has become talk of the town. Now the news is coming that Sam Bankman-Fried has stepped down as the chief executive officer of the company. The organization officially announced on Twitter that they have filed Chapter 11 of the United States Bankruptcy Code in the District of Delaware.
According to the news, John Ray III will step up to hold the position of company CEO. Ray said that administration of FTX group assets requires an organized, joint process. He added that they are creating a new team to handle the situation amid the fast moving events.
Security and Exchange Commission (SEC), the US regulatory watchdog, said that the new CEO is involved in insider trading. The regulator alleged that he had previously failed to disclose the financials in the previous company. They added that he traded stocks of 3 organizations while serving as organization’s director.
John Ray III is currently busy restructuring the company and has appointed Sullivan and Cromwell and Alvarez and Marsal as FTX’s advisors. According to the Reuters report, the new CEO said that restructuring is necessary to make the future moves. He possesses ample experience as a Chief restructuring Officer with forms like Enron, Overseas Shipholding Group and more in the past.
Sam Bankman-Fried previously stated that the company is short of around $6 Billion for the user withdrawal requests. He was trying to raise the funds to save the company from the collapse. Owner of the world’s largest crypto exchange approached them to offer hands, but turned their backs just 24 hours after they agreed to acquire FTX.
According to the reports, the biggest crypto exchange said that they will dump all FTT token holdings in the market. This ultimately created chaos in the market as the investors started selling their FTT holdings in the market. The digital asset fell quickly by the face and is currently trading at the market price of $2.5, representing an over 80% value loss in the last few days.
Previously, BlockFi, a crypto lending firm, stopped withdrawals from the network following the recent chaos in the market. They said that the company was unable to process their usual activities due to lack of clarity due to present FTX conditions. Both the organizations issued a statement regarding their partnership where SBF-backed crypto exchange would provide a $400 Million credit facility to the firm.
Crypto market has again slipped below $1 Trillion in terms of market capitalization. Bitcoin and Ethereum still had a combined dominance of 56.3% in the cryptosphere, but both the assets have gone through a massive downturn in 2022.
Source: https://www.thecoinrepublic.com/2022/11/12/sam-bankman-fried-will-no-longer-serve-as-ftx-ceo-position-already-filled/