At the end of the eventful week, FTX announced that it had started Chapter 11 bankruptcy proceedings.
FTX, a Bahamas-based cryptocurrency exchange established in 2019, is filing for Chapter 11 bankruptcy proceedings in the United States.
According to a tweet shared on November 11th, together with FTX.com, the application is filed for FTX US, Alameda Research, and around 130 companies in FTX Group.
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On top of that, FTX CEO Sam Bankman-Fried has resigned from his position, with John J. Ray III appointed as the new Chief Executive Officer. Based on the press release, Sam Bankman-Fried “will remain to assist in an orderly transition.”
In the press release, the new CEO, John J. Ray III, noted:
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. <...> 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.
The bankruptcy proceedings were started under Chapter 11 of the United States Bankruptcy Code in the District of Delaware.
It is worth noting that LedgerX LLC, FTX Digital Markets Ltd., FTX Australia Pty Ltd., FTX Express Pay Ltd., FTX Capital Markets LLC, Embed Financial Technologies Inc., and Embed Clearing LLC are not included in the proceedings.
In response to the announcement, former CEO Sam Bankman-Fried shared a Twitter thread apologizing for the current company’s situation.
Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them. Ultimately hopefully it can be better for customers.
Moreover, Bankman-Fried promised to provide detailed information about “user recovery” and further actions the company will take regarding the proceedings and fund recovery.
After a few days of silence, on November 10th, Sam Bankman-Fried shared an extensive Twitter thread taking responsibility for his mistakes, stating that he “should have done better.”