Cryptocurrency exchange FTX filed for bankruptcy in the US on Friday, seeking court protection as it looks for a way to return money to users.
Former boss Sam Bankman-Fried has also stepped down as chief executive, the company said. It is a massive turn of fortunes for the 30-year-old, who had headed the world’s second-largest crypto exchange.
In just over a week, his FTX empire has collapsed, shaking confidence in the already troubled crypto market.
“I’m really sorry, again, that we ended up here. Hopefully, things can find a way to recover,” Bankman-Fried, nicknamed the ‘King of Crypto’, wrote on Twitter on Friday.
“I was shocked to see things unravel the way they did.”
22) And, finally:
I sincerely apologize.
We'll keep sharing updates as we have them.
— SBF (@SBF_FTX) November 10, 2022
The filing in Delaware federal court on Friday included the main FTX international exchange, a US crypto marketplace, Bankman-Fried’s proprietary trading group Alameda Research and about 130 affiliated companies.
Customers withdraw funds from the cryptocurrency FTX exchange
Prior to the meltdown, Bankman-Fried had been one of the stars of the crypto scene, drawing comparisons to investment magnate Warren Buffett, with a net worth estimated at more than $15bn (£12.8bn) as recently as Monday, the BBC reports.
But rumors earlier this week that FTX and other firms owned by Bankman-Fried were on shaky financial ground prompted a mass of customers to try to withdraw funds from FTX, an exchange used to buy and sell digital tokens.
Facing a cash crunch, Bankman-Fried tried to organize a bailout but that failed, leaving FTX scrambling to raise billions of dollars and many customers unable to access their money.
The collapse of such a prominent group, which advertised during the US Super Bowl and whose shorts-wearing, charismatic founder was a leading donor to the Democratic party, has rocked the notoriously volatile crypto industry, the Financial Times says.
Bitcoin dropped 5 percent to a fresh two-year low of $16,492 after the FTX bankruptcy was announced. Changpeng Zhao, chief executive of Binance, earlier on Friday said the fall of FTX left crypto facing a financial crisis akin to 2008 and that more businesses could fail in its wake, the paper adds.
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