Crisis-struck cryptocurrency exchange platform FTX on Friday filed for bankruptcy in the US and sought the protection of the court while it seeks ways to return money to investors.
This comes as its Chief Executive Officer Sam Bankman-Fried also resigned as the company grapples with a financial crisis that has shaken the entire global digital currency landscape.
The 30-year-old’s revered FTX empire, which was the world's second largest crypto exchange, came tumbling down in a week sending shockwaves to the already trouble sector.
“I'm really sorry, again, that we ended up here. Hopefully things can find a way to recover," posted Sam on Twitter on Friday.
He added: “I was shocked to see things unravel the way they did.”
Sam had a staggering net worth of more than $15 billion early last week before the FTX meltdown started and drowned the “King of Crypto” once considered the crypto poster boy.
FTX clients tried a run on the platform after reports circulated that other companies linked to Sam were also facing financial hurdles after the digital tokens buying and selling platform.
The former FTX boss unsuccessfully tried to organize a bailout for his drowning firm leaving many of its optimistic customers unable to gain access to their money in the firm’s wallets.
According to US laws, when a company files for Chapter 11 bankruptcy, it is permitted to continue with its operations as it restructures its debts under the supervision of the court.
“The FTX Group has valuable assets that can only be effectively administered in an organised, joint process,” said FTX new CEO John J Ray III.
The former crypto giant, in its bankruptcy filing, estimated its assets and liabilities at between $10 billion and $50 billion respectively alongside more than 100,000 creditors.
Based on a statement shared by FTX on Twitter, the court proceedings involve FTX and Alameda Research, a trading company founded by Sam, as well as up to 130 associates.
1) Hi all:— SBF (@SBF_FTX) November 11, 2022
Today, I filed FTX, FTX US, and Alameda for voluntary Chapter 11 proceedings in the US.
The firm reportedly faces a probe by a host of regulators with Sam admitting the fantastic fall of the giant was his fault as up to 1.2 million FTX clients risk losing their crypto savings.
This comes as Reuters, in an exclusive story, reported that at least $1 billion of customers funds were missing at the failed crypto company following its downfall last week.