Sam Bankman-Fried’s cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy in the U.S., according to a company statement posted on Twitter. Bankman-Fried has also stepped down as CEO and has been replaced by John J. Ray III.
Alameda Research, Bankman-Fried’s crypto trading firm, and approximately 130 different affiliated companies are part of the voluntary proceedings.
“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,” said the new FTX chief, Ray.
“The FTX Group has valuable assets that can only be effectively administered in an organized, joint process. I want to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency,” continued Ray.
In only a few days, FTX went from a $32 billion valuation to bankruptcy as liquidity dried up, customers demanded withdrawals, and rival exchange Binance ripped up its nonbinding agreement to buy the company. FTX founder Sam Bankman-Fried admitted on Thursday that he “f—ed up.”
