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November 11, 2022, 9:23 am EST
In a notice posted to the FTX official Twitter account this morning, FTX announced that Sam Bankman-Fried would be stepping down from his position as CEO of the FTX Group.
Approximately 130 companies affiliated with Bankman-Fried’s FTX Group have also commenced voluntary bankruptcy proceedings, according to the note.
New CEO John J. Ray III said that FTX has “valuable assets that can only be effectively administered in an organized, joint process” and noted that the Chapter 11 proceedings do not include LedgerX LLC, FTX Digital Markets Ltd, FTX Australia Pty Ltd. and FTX Express Pay Ltd.
Ray previously held CEO, chief reorganization officer and other similar roles at various public and private companies, including Enron Corp., Fruit of the Loom and Nortel Networks.
FTX is rumored to have a massive hole in its balance sheet, with some estimates rising as high as $9 billion.
Over the past two weeks, Bankman-Fried’s $32 billion company collapsed in the face of mounting evidence that the relationship between FTX and Alameda Research, the trading arm he also co-founded, was deeply unhealthy. Regulatory and legal authorities are now looking into that relationship, and the allegation that FTX loaned customer funds to Alameda, which the latter used to make risky bets on crypto.
Binance backed away from its earlier plan to acquire FTX, tweeting Wednesday afternoon that it would not pursue buying the company. The rival exchange’s decision was “a result of corporate due diligence, as well as the latest news reports regarding mishandled customer funds and alleged US agency investigations,” according to a Binance statement.
Bankman-Fried’s resignation comes after he apologized for FTX’s collapse in a Twitter thread Thursday.
“I’m sorry. That’s the biggest thing,” he tweeted at the time. “I f**ked up and should have done better.”
Bankman-Fried added in the Twitter thread that the company was in talks with “a number of players” as it searched for liquidity.
FTX’s bankruptcy proceedings are not unique for the industry this year. Voyager Digital filed for bankruptcy in early July, while crypto lender Celsius initiated bankruptcy proceedings about a week later in the aftermath of the collapse of Terra’s algorithmic stablecoin.
The owner and operator of FTX US scooped up Voyager Digital assets estimated to be worth more than $1.4 billion at an auction in September. But Voyager said in a statement Thursday that the transaction between FTX and Voyager “has not been consummated.”
This is a developing story and will be updated.
Ben Strack contributed reporting.
- Jon Rice
Blockworks
Editor-in-Chief
Jon is the editor-in-chief at Blockworks. Previously, he served as editor-in-chief at Cointelegraph, where he also created and edited the long-format magazine publication. He is the co-founder of Crypto Briefing, which launched in 2017.
He is a staunch advocate for diversity, inclusion and equal opportunity in the blockchain industry, and a firm believer in the potential for personal empowerment offered by the democratization of financial markets.
Source: https://blockworks.co/news/ftx-ceo-bankman-fried-resigns-bankruptcy-proceedings-begin/