Sam Bankman-Fried Resigns as FTX CEO as His Crypto Exchange Files for Bankruptcy

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Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, during an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, US, on Wednesday, August 17, 2022.

Jeenah Maan | Bloomberg | Getty Images

Sam Bankman-Fried cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy in the US company statement posted on Twitter. Bankman-Fried has also stepped down as CEO and has been replaced by John J. Ray III, although the outgoing chief is staying on to help with the transition.

About 130 additional affiliates are part of the proceeding, including Alameda Research, Bankman-Fried’s crypto trading firm, FTX.us, the company’s US subsidiary.

In the 23-page bankruptcy filing obtained by CNBC, FTX indicates it has more than 100,000 creditors, assets in the $10 billion to $50 billion range, as well as liabilities in the $10 billion to $50 billion range. Bankman-Fried also said it would like to appoint Stephen Neal as the company’s new chairman.

“The immediate relief of Chapter 11 is appropriate to provide the FTX Group with the opportunity to assess its situation and develop a process to maximize recovery for stakeholders,” said new FTX chief Ray.

“The FTX Group has valuable assets that can only be managed effectively in an organized, collaborative process. I want to assure every employee, customer, creditor, contractor, shareholder, investor, government agency and other stakeholders that we are going to carry out this effort with diligence, thoroughness and transparency,” Ray continued.

He added that stakeholders need to understand that events are evolving quickly and that the new team has only recently been involved and that they should review the materials submitted in the lawsuits over the next few days for more information.

It ends a tumultuous week for one of the biggest names in the industry.

Within days, FTX went from a $32 billion valuation to bankruptcy as liquidity dried up, customers demanded withdrawals and rival exchange Binance tore up its non-binding agreement to buy the company. FTX founder Sam Bankman-Fried admitted on Thursday that he “f–ed up”.

Anthony Scaramucci, the founder of SkyBridge Capital and short-lived Trump communications director, flew to the Bahamas this week to help Bankman-Fried as an investor and friend. When he got there, he says, it seemed beyond a simple liquidity rescue. He said he saw no evidence of this mistreatment when he and other investors first screened FTX as a potential business partner.

“I think ripped off is the right word, but I’m very disappointed because I like Sam,” Scaramucci told CNBC’s Squawk Box Friday morning. “I don’t know what happened because I wasn’t an insider at FTX.”

The Chapter 11 proceeding excludes the following subsidiaries: LedgerX LLC, FTX Digital Markets Ltd., FTX Australia Pty Ltd. and FTX Express Pay Ltd.

This is a news item. Come back for updates.

CNBC’s Jack Stebbins and Lillian Rizzo contributed to this report.





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