Troubled cryptocurrency exchange FTX has filed for Chapter 11 bankruptcy in the US as the platform reportedly owes its users around $10 billion.
According to a published statement on Twitter, approximately 130 firms affiliated with FTX are part of the proceedings in the proceedings. FTX Australia and LedgerX were not included in the case.
FTX Founder Sam Bankman-Fried has stepped down as CEO and requested the court to appoint Stephen Neal as FTX’s new chairman of the board. The exchange said in the bankruptcy filing that it has 100,000 creditors as well as liabilities in the range from $10 billion to $50 billion.
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Prior to the bankruptcy, The Wall Street Journal reported that FTX boss was seeking emergency funding to cover a shortfall of up to $8 billion due to a massive wave of withdrawals requests in recent days. Reuters also reported that at least $4 billion in FTX funds — including clients’ assets — had been transferred by Bankman-Fried to keep Alameda Research afloat.
FTX was trying to find any interested investors it could in a rush after Binance had publicly refused to proceed with its acquisition plans, citing mishandled customer funds and alleged US agency investigations related to FTX.