Key Insights
- According to reports on Friday, the CEO of FTX, Sam Bankman-Fried, resigned after the distressed exchange filed for bankruptcy.
- FTX went from a $32 billion valuation to bankruptcy in a few days.
According to reports on Friday, the CEO of FTX, Sam Bankman-Fried, resigned after the distressed exchange filed for bankruptcy.
The official press release, states that the FTX Group (which includes FTX.com, Alameda Research, and about 130 other additionally connected entities) filed for chapter 11 bankruptcy.
John Ray III, Bankman-Fried’s successor, commented on SBF’s resignation, stating that Fried may have resigned but will still help in an “orderly transition.”
“The immediate relief of Chapter 11 is appropriate to provide the FT-X Group the opportunity to assess its situation,” Ray said. “It will also help to develop a process to maximize recoveries for stakeholders.”
Ray also mentioned that the FT-X Group has essential assets that can only be managed profitably through a collaborative process. He reassured the FT-X stakeholders, employees, customers, creditors, contract parties, stockholders, investors, governmental bodies, and others that all the necessary steps would be taken with due diligence, thoroughness, and openness.
The FTX CEO Resignation
“Stakeholders should be aware that things have moved quickly, and the new team has only recently been brought on.” Ray continued. “For more information, they should review the materials filed on the proceedings docket over the next few days.”
Recall that FTX went from a $32 billion valuation to bankruptcy in a few days as its liquidity dried up and its customers started to demand withdrawals. The last straw that broke the camel’s back came after Binance canceled its non-binding agreement to buy the exchange.
When it was all over, Bankman-Fried himself admitted in a tweet that he was sorry and that he was “F—-d Up.”
Contrary to Binance’s reasons for canceling the buy-out deal, Anthony Sacramucci, short-time Trump Communications Director and founder of Skybridge Capital, mentioned that the issue with FT-X seemed to go beyond the scope of a straightforward liquidity rescue.
He further mentioned that when he and other investors initially assessed FTX as a potential business partner, they found no proof of this mistreatment Binance spoke of.
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