FTX will initiate bankruptcy proceedings in the United States while its Chief Executive Sam Bankman-Fried resigned, the embattled cryptocurrency exchange said on Friday, triggering what could be one of the biggest meltdowns in the industry.
The announcements, made on the company's Twitter handle, come days after larger rival Binance walked away from a proposed acquisition and left it scrambling to raise about $9.4 billion from investors and rivals.
Bankman-Fried's trading firm Alameda Research is also part of the bankruptcy protection, the company said. Sources have said that it was partly behind FTX's problems and reportedly owes FTX roughly $10 billion.
FTX's collapse marks a stunning reversal of fortunes for the company and its founder Sam Bankman-Fried, who until recently was hailed as a "white knight" and drew comparisons to billionaire Warren Buffett.
It also raises questions about the future of smaller firms like BlockFi and bankrupt crypto lender Voyager Digital, which had signed rescue packages with FTX after the spectacular crash of TerraUSD in May pushed many companies to the brink of collapse.
FTX was seeking a lifeline after a liquidity crunch due to customers withdrawing funds at a frenetic pace. It also fans concerns about the future of the crypto industry, which faces an uphill task of regaining favor among retail investors.
https://www.ft.com/content/afe56c4e-2d68-457e-bbb2-476752d5f02e
Bankman-Fried also resigned as chief executive and will be replaced by John J Ray III, a restructuring specialist who oversaw the Enron and Nortel Networks bankruptcy cases.
lmao owned
I think there's still a possiblity that btc stabilizes relatively and it becomes a digital currency instead of an extremely high volatility investment vehicle
but god I hope it sinks like the Bismarck
China and USA are already creating their own digital currencies. Bitcoin is going to be erased entirely when the Fed needs to evaporate worthless assets to fight inflation.
BTC is too deflationary/unstable and processes too slow to be a currency. For example, how could you use it to buy a retail item if the transaction takes 15 minutes and the value of the currency could fluctuate significantly during that timeframe?
oh yeah, that's a fair point. The transaction time makes it straight up worse than USD for the user whether they're doing legal or illegal shit. And the deflation would sink it once the speculative juicing slows down. I don't fully understand the deflation — I know the mining rate goes down by design, but does that directly cause deflation? or is it more of a knock-on effect of reduced velocity?
i think capitalists are gonna capitalist and another bubble form in a few years.
look at the line go yooo :soypoint-2:
nearly every crypto is experiencing a similar drop :lets-fucking-go:
Bitcoin is being pumped back now, 17.5k > 16.6k > 17k in half an hour
I'm guessing the customers will have the lowest priority in bankruptcy, most of the money will go to creditors.
this whole thing has been a speedrun of the 1890s through 1920s scam garden that led to the SEC
I hate to say it - but they're going to ask for a bailout and they're most likely going to get it.
Do they've enough clout for that doe? Crypto market and exchanges is still very small compared to actual banks.
Nah, no one gonna bail out fakecoin. The fed instead gonna let them burn and take control
:michael-laugh: HAHAHAHAHAHAHAHAHAHA :michael-laugh:
