FTX was valued at 32,000 million dollars but in recent days it has collapsed due to lack of liquidity
platform cryptocurrenciesFTX announced this Friday that it requested to benefit from the bankruptcy process in the United States and that its founder and maximum responsible, Sam Bankman-Fried, I resigned. The decision confirms the total collapse of this platform, one of the most important in the sector, which came to be valued at 32,000 million dollars and which in recent days collapsed due to lack of liquidity and with users rushing to withdraw their funds. .
In a statement, FTX assured that the bankruptcy declaration is the appropriate measure to manage the company’s assets and protect the interests of its shareholders. The process affects some 130 affiliated companies, including its investment firm Alameda Research, but not affiliates Ledgerx.LLC, FTX Digital Markets, LTD, FTX Australia and FTX Express Pay.
The company announced that the CEO position will be assumed by John J. Ray III and said that Bankman-Fried and many of the firm’s employees will continue to work to assist the new CEO and independent professionals during the bankruptcy process.
The movement was announced hours after authorities in the Bahamas, where FTX is headquartered, froze the group’s assets and take the first steps to appoint a person in charge of liquidating one of their entities. FTX landed in the Bahamas in 2021 from Hong Kong, where it had started operations and established itself as one of the most successful platforms in the cryptocurrency industry.
In recent days, doubts about the company’s solvency have been triggered by various reports, which led many users to rush to withdraw their money, leaving FTX without liquidity and in search of a rescue.
FTX’s situation got even more complicated on Wednesday, when Binance – the main currency exchange platform in the world – announced that it was withdrawing the purchase offer which he had announced a day before, when he had offered to come to his rival’s support. “Our intention was originally to support FTX clients in their search for liquidity, but the matter is beyond our control and our ability to help,” Binance said in a statement.
The movement caused a new crash of FTT, the digital asset of FTX, and sharp falls in the entire cryptocurrency market, just one year after bitcoin – the most important cryptocurrency – reached its all-time high.
Finally, this Thursday Bankman-Fried apologized and admitted that it made mistakes when calculating the levels of liquidity that were necessary, as well as when giving explanations about the situation of the platform once the crisis broke out. The 30-year-old billionaire said then that he would be doing everything possible to obtain liquidity and avoid a bankruptcy that finally materialized today, with a financial hole that is estimated at some 8,000 million dollars.
In the meantime, numerous details about the operation of the platform have come to light, including the fact that FTX used billions of dollars deposited by its clients to finance risky investments.
FTX, a source told The Wall Street Journal, lent the money to its investment firm, Alameda Research, which used it in aggressive trades and now owes the platform some $10 billion.
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