Sam Bankman-Fried resigns, FTX files for bankruptcy

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

Jeenah Moon | Bloomberg | Getty Images

Sam Bankman-Fried’s FTX cryptocurrency exchange has filed for Chapter 11 bankruptcy protection in the US, according to one. 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 Bankman-Fried has also stepped down as CEO and has been replaced by John J. Ray III, although the outgoing leader will stay on to help with the transition.

Approximately 130 additional affiliated companies are part of the proceedings, including Alameda Research, Bankman-Fried’s crypto trading firm, and, the company’s US subsidiary.

In the 23-page bankruptcy filing obtained by CNBC, FTX states that it has more than 100,000 creditors, assets of between $10 billion and $50 billion, as well as liabilities of between $10 billion and $50 billion. By comparison, Lehman had more than $600 billion in assets and Enron had $60 billion.

Bankman-Fried has also announced that it intends to appoint Stephen Neal as the company’s new chairman of the board. However, a spokesman later said Neal has decided not to serve. “While honored by the request, it appears that unfortunately he is unable to serve in this capacity for reasons unrelated to FTX., Inc. or its former CEO.”

CNBC caught up with Adam Landis, founding partner of Landis Rath & Cobb LLP, which filed the Chapter 11 proceeding on behalf of FTX. CNBC did not immediately respond to our request for comment.

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

“The FTX Group has valuable assets that can only be effectively managed in an organized and unified process. I want to ensure that all employees, customers, creditors, contractual parties, shareholders, investors, government authorities and other stakeholders will do this. and transparently,” Ray continued.

He added that stakeholders should understand that events have moved quickly, that the new team has only recently been active and that they should review the materials presented in the proceedings file in the coming days for more information.

It ends a busy week for one of the biggest names in the sector.

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

Anthony Scaramucci, the founder of SkyBridge Capital and Trump’s short-time communications director, flew to the Bahamas this week to support Bankman-Fried as an investor and friend. When Scaramucci got there, he says, liquidity appeared to be more than just a bailout. When he and other investors first looked at FTX as a potential business partner, he said he saw no evidence of abuse.

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

An FTX spokesperson did not immediately respond to CNBC’s request for comment on this story, including Scaramucci’s remarks.

In a short period of time, non-cryptic elements of FTX life spread, such as in pop culture. For example, in the past Super Bowl, it He posted an ad With comedian Larry David, David turned down an opportunity to invest in crypto. “Eh, I don’t think so. And I’m never wrong about this stuff. Ever.”

GameStop is ending its partnership with FTX, according to people familiar with the matter. Under the deal announced in September, GameStop sold FTX gift cards at certain stores and FTX promoted the store in return.

Termination of business deals, like with GameStop, will likely continue after FTX’s bankruptcy filing.

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

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

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