FTX files for US bankruptcy amid cryptocurrency exchange meltdown


FTX will begin bankruptcy proceedings in the US while its CEO Sam Bankman-Fried stepped down, 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 bigger rival Binance walked away from a proposed acquisition, leaving it struggling to raise about $9.4 billion from investors and rivals.

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Bankman-Fried’s trading firm Alameda Research is also part of the bankruptcy protection, the company said. Sources have said that was partly behind FTX’s problems and reportedly owes FTX about $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.

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It also raises questions about the future of smaller firms such as BlockFi and bankrupt crypto-lender Voyager Digital, which had signed bailouts with FTX after TerraUSD’s spectacular crash in May pushed many companies to the brink of collapse.

FTX sought a lifeline after a liquidity crunch due to customers withdrawing money at a frantic pace. It also captures concerns about the future of the crypto industry, which faces an uphill task in regaining favor among retail investors.

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