Sam Bankman-Fried steps down as FTX CEO as his crypto exchange files for bankruptcy

Sam Bankman-Fried, founder and chief govt officer of FTX Cryptocurrency Derivatives Change, throughout an interview on an episode of Bloomberg Wealth with David Rubenstein in New York, US, on Wednesday, Aug 17, 2022.
Jeenah Moon | Bloomberg | Getty Pictures

Sam Bankman-Fried’s cryptocurrency trade FTX has filed for Chapter 11 chapter safety within the U.S., in line with a company statement posted on Twitter. Bankman-Fried has additionally stepped down as CEO and has been succeeded by John J. Ray III, although the outgoing chief will keep on to help with the transition.

Roughly 130 extra affiliated corporations are a part of the proceedings, together with Alameda Analysis, Bankman-Fried’s crypto buying and selling agency, and FTX.us, the corporate’s U.S. subsidiary.

Within the 23-page chapter submitting obtained by CNBC, FTX signifies it has greater than 100,000 collectors, property within the vary of $10 billion to $50 billion, in addition to liabilities within the vary of $10 billion to $50 billion. Bankman-Fried additionally indicated he needs to nominate Stephen Neal because the agency’s new chairman of the board.

CNBC reached out to Adam Landis, founding associate of Landis Rath & Cobb LLP, who filed the Chapter 11 proceedings on behalf of FTX. CNBC didn’t instantly hear again to our request for remark.

“The rapid reduction of Chapter 11 is acceptable to offer the FTX Group the chance to evaluate its scenario and develop a course of to maximise recoveries for stakeholders,” mentioned the brand new FTX chief, Ray.

“The FTX Group has precious property that may solely be successfully administered in an organized, joint course of. I need to guarantee each worker, buyer, creditor, contract celebration, stockholder, investor, governmental authority and different stakeholder that we’re going to conduct this effort with diligence, thoroughness and transparency,” continued Ray.

He added that stakeholders ought to perceive that occasions have been fast-paced, that the brand new crew is engaged solely just lately and that they need to overview the supplies filed on the docket of the proceedings over the approaching days for extra info.

It caps off a tumultuous week for one of many greatest names within the sector.

In the space of days, FTX went from a $32 billion valuation to chapter as liquidity dried up, clients demanded withdrawals and rival trade Binance ripped up its nonbinding agreement to purchase the corporate. FTX founder Bankman-Fried admitted on Thursday that he “f—ed up.”

Anthony Scaramucci, founding father of SkyBridge Capital and short-time Trump communications director, flew to the Bahamas this week to assist Bankman-Fried as an investor and buddy. When Scaramucci obtained there, he says, it appeared past the purpose of a easy liquidity rescue. He mentioned he did not see proof of this mishandling when he and different buyers first screened FTX as a possible enterprise associate.

“Duped I assume is the fitting phrase, however I’m very dissatisfied as a result of I do like Sam,” Scaramucci mentioned Friday morning on CNBC’s “Squawk Box.” “I do not know what occurred as a result of I used to be not an insider at FTX.”

An FTX spokesperson didn’t instantly reply to CNBC’s request for touch upon this story, together with on Scaramucci’s remarks.

In a brief time period, FTX expanded into non-crypto components of life, resembling popular culture. For instance, previously Tremendous Bowl, it aired a commercial that includes comic Larry David, by which David turned down a possibility to put money into crypto. “Ehh, I do not suppose so. And I am by no means improper about these items. By no means.”

GameStop is winding down its partnership with FTX, in line with folks accustomed to the matter. Below the settlement, announced in September, GameStop offered FTX reward playing cards in choose shops and whereas FTX promoted the retailer on its trade.

The winding down of enterprise agreements, just like the one with GameStop, will probably proceed following the FTX chapter submitting.

The Chapter 11 proceedings exclude the next subsidiaries: LedgerX LLC, FTX Digital Markets Ltd., FTX Australia Pty Ltd., and FTX Specific Pay Ltd.

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

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