FTX files for bankruptcy following a torrent of withdrawals
Earlier this week, FTX was valued at $15 billion
Published: 11th November 2022 | Source: FTX |
Cryptocurrency exchange FTX files for bankruptcy in the US
FTX, the cryptocurrency exchange, has officially filed for chapter 11 bankruptcy protections in the US with chief executive Sam Bankman-Fried stepping down as the company's CEO.
Prior to the company's meltdown, FTX' value was estimated to be in the billions, with valuing from earlier this year being at an estimated $32 billion with valuings from as recently as November 8th being $12 billion.
FTX has become well known within the US following a successful advertising campaign that had celebrities like Tom Brady and Gisele Bundchen discuss the company as an investment vehicle. With turbulence in the cryptocurrency market at large, problems for FTX quickly spiralled out of control, leading to investors pulling their funds from the company, leading to its bankruptcy.
FTX's collapse has come after 10 days of turmoil, where former CEO Bankman-Fried desperately sought billions of dollars to prop us his company as investors lost faith in the company. Investors became concerned about FTX's financial health as links to Almeda Research, another company founded by Bankman-Fried emerged. Now we know that FTX used $10 billion in customer funds to prop up Almeda Research, who promptly lost all of the money. Now, FTX's investors are now set to lose much of their savings.
Sam Bankman-Fried, a man who was known by many as the "king of crypto", has Tweeted an apology for the crisis that has swallowed his company. "I’m sorry. That’s the biggest thing. I f***ed up, and should have done better." he said on Thursday.
The fall of FTX will undoubtedly have repercussions on the wider cryptocurrency market and how it is regulated, especially within the US. FTX had over 1.2 million customers, and all of them could now lose their savings.
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