Crypto is one of the most uncertain markets in the world and what happened to crypto giant FTX is a testament to that. FTX Trading Limited, which is an affiliated crypto trading firm has recently collapsed and filed for US bankruptcy protection on Friday as it is exploring a way to return money to the users.
As the firm declared bankruptcy, its CEO Sam Bankman-Fried stepped down from his executive position. FTX was the second-largest crypto trading company in the world before it toppled down
“I’m really sorry, again, that we ended up here. Hopefully, things can find a way to recover,” Mr Bankman-Fried, nicknamed the ‘King of Crypto’, wrote on Twitter on Friday.
FTX major collapse: What we know so far
FTX, its affiliated trading firm Alameda Research, and 130 of its other subsidiaries on Friday filed for voluntary bankruptcy proceedings, the company said on Twitter.
- It initiated the process under Chapter 11 bankruptcy proceedings in Delaware.
- Chapter 11 is a US mechanism under bankruptcy ruling that allows registered firms to restructure their debts under the court’s supervision.
- As per the petition, FTX Trading declared $10 billion to $50 billion in assets, $10 billion to $50 billion in liabilities, and more than 100,000 creditors.
- John J Ray III, who led US energy giant Enron in 2001 through its shaky bankruptcy proceedings, has taken over as FTX’s new CEO.
- FTX also agreed to sell itself to bigger rival Binance after a massive customer exodus but the company later refused to go ahead with the deal after assessing FTX’s books.
- In January this year, FTX raised $400 million from investors valuing the company at $32 billion.
- FTX’s bankruptcy triggered turbulence in the already shaky crypto market pushing down Bitcoin’s value 20% this week
US authorities awaken: Action likely on FTX
According to AP, the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC)have started looking into FTX’s books to ascertain if any financial transgression took place under its roof.The central agencies are also investigating any criminal activity in the now-collapsed company.
