Bankman-FTX Fried’s cryptocurrency exchange declares bankruptcy after a failed rescue attempt.
After a turbulent week during which the business saw a flood of client withdrawals and the plan to be acquired by Binance fell through, it filed for bankruptcy. Having resigned as CEO, Bankman-Fried, the coins are dropping.
The FTX cryptocurrency exchange, owned by billionaire Sam Bankman-Fried, has announced that it has filed for bankruptcy in the US in a tweet. In doing so, Bankman-attempt Fried’s to salvage the business, whose worth was believed to be $32 billion until a few days ago, which was struck by a wave of client withdrawals totaling billions of dollars and the failure of the deal for competitor Binance to buy it, failed. Bankman-Fried made an announcement about leaving his position as CEO of FTX after declaring bankruptcy. Cryptocurrencies see a decline after the announcement: Bitcoin loses roughly 7%, while Ethereum loses about 8%.
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For FTX, the bankruptcy filing closes out a difficult and stormy week. Due to “recent developments,” the CEO of Binance declared on Sunday that he will liquidate his FTX currency holdings.
After FTX’s currency lost roughly 20% of its value on Tuesday, Bankman-Fried stated that the platform was “great,” adding that any worries are the result of “False Rumors.” Binance and FTX announced their agreement on Tuesday in a bold move meant to ease worries about FTX’s stability. After signing the contract, Bankman-Fried noted in a letter that “Every asset would be protected exactly. This was one of the key justifications for inviting Binance.” But as was well reported, the transaction collapsed after just 24 hours.
It was revealed earlier today that FTX is attempting to raise $9.4 billion from investors and competing businesses. It was revealed that Bankman-Fried had talked about getting $1 billion from Justin Sun, the creator of the cryptocurrency Tron, as well as getting comparable sums from the rival platform OKX and the stable currency platform Tether. Tether has “no intention of investing or lending assets to FTX,” according to Paolo Arduano, the company’s chief technical officer, in a tweet. Daniel Loeb and his Third Point fund are another investor in FTX, although an insider claims that the fund does not actively pursue conversations to raise further money for the business.
FTX’s management of client cash and loans is the subject of an investigation by the US Securities and Exchange Commission, it was also revealed today. Reuters was unable to determine whether particular activities are the focus of the probe, though. The White House also stated that the developments highlight the need for “tight regulation”. The failure of numerous other big firms, including Terra Luna, Celsius, and hedge fund Three Arrows, has caused tremendous upheaval in the cryptocurrency sector this year.