Cryptocurrency exchange FTX has filed for bankruptcy protection following its collapse this week and its former billionaire CEO Sam Bankman-Fried has resigned, in a collapse for the company that was valued at $32bn just months ago.
The announcements come days after its rival Binance walked away from a proposed acquisition
Cryptocurrency exchange FTX has filed for bankruptcy protection following its collapse this week and its former billionaire CEO Sam Bankman-Fried has resigned, in a collapse for the company that was valued at $32bn just months ago.
The collapse of FTX comes a week after Bankman-Fried sought billions of dollars to save his company after customers rushed to pull their assets out of the business.
Bankman-Fried had sought $6bn to $8bn to stem a liquidity crunch.
“I fucked up, and should have done better,” the 30-year-old said apologising on Thursday for the crisis.
Bankman-Fried will “remain to assist in an orderly transition”, FTX said in a statement on Friday.
The announcements come days after its rival Binance walked away from a proposed acquisition.
FTX and its CEO and founder Sam Bankman-Fried are under investigation by the Department of Justice and the Securities and Exchange Commission to determine whether any criminal activity or securities offenses were committed., Associated Press reported.
The investigation is centering on the possibility that the firm may have used customers' deposits to fund bets at Bankman-Fried's hedge fund, Alameda Research.
FTX had agreed earlier this week to sell itself to bigger rival Binance after experiencing the cryptocurrency equivalent of a bank run.
The crypto world had hoped that Binance, the world's largest crypto exchange, might be able to rescue FTX and its depositors. However, after Binance had a chance to look at the books of FTX, it became clear that the smaller exchange's problems were too big to solve.