Sam Bankman-Fried’s crypto exchanges FTX and FTX.US, trading firm Alameda Research, and over 100 related entities have declared Chapter 11 bankruptcy.
Chapter 11 bankruptcy is focused on reorganization to maximize value, though it’s unclear how much value will be remaining with a reported $10 billion hole in FTX’s books.
Bankman-Fried has resigned as chief exec and been replaced with lawyer John J. Ray III, who notably served as chairman of Enron during its bankruptcy.
Despite repeated claims by Bankman-Fried that the crypto exchange’s American arm, FTX US, was fine — as late as yesterday claiming it was not “financially impacted by this shitshow,” — it’s among the entities declaring bankruptcy.
The press release from FTX currently claims that LedgerX, FTX Digital Markets, FTX Australia, and FTX Express Pay have not yet declared bankruptcy.
The collapse of FTX and Alameda Research continues to be felt across the entire ecosystem. BlockFi announced it has ceased normal operations. Genesis has received an equity infusion from Digital Currency Group (DCG). It’s still unclear exactly how far the collapse will spread.
The downfall of his empire began last week when CoinDesk revealed Bankman-Fried’s crypto trading firm Alameda Research had extraordinary exposure to FTX’s native token (FTT).
Since then, the extent of the conflict and size of the problem has become clearer — while FTX desperately searched for potential acquirers before inevitably landing in bankruptcy.