The FTX cryptocurrency platform, in turmoil for a week, announced on Friday November 11 that it was placed under the protection of American bankruptcy law, as well as the resignation of its leader Sam Bankman-Fried. “FTX Trading (…) and approximately 130 companies affiliated with FTX Group have started the voluntary procedure of ‘chapter 11’ (of the bankruptcy law)”, in order to “evaluate and monetize (their) assets”, FTX announced in a statement posted on its Twitter account.
Among the subsidiaries concerned, the two trading platforms (FTX.us in the United States and FTX.com in the rest of the world), as well as the investment fund Alameda Research, which had been launched by Sam Bankman-Fried before FTX. The latter was replaced by John J. Ray III, and “will remain to help with a transition in the rules”, specifies the press release.
“The Chapter 11 regime is appropriate to give FTX Group the opportunity to assess the situation and put in place a procedure for maximum return on investment for investors,” says Mr. Ray.
The flashfall of FTX has stunned the cryptocurrency world: just over a week ago, the group was considered the second largest cryptocurrency platform in the world. But news reports revealed that his Alameda Research fund was investing in cryptoassets issued by FTX.com in a risky financial package.
FTX’s woes were accentuated by industry leader Binance, which offered to buy FTX.com on Tuesday before backing out on Wednesday. The exacerbated instability of the sector caused cryptocurrencies to plunge over the week, and bitcoin lost 3.9% on Friday to 17,009 dollars.
