Crypto exchange FTX files for bankruptcy as wunderkind CEO exits
Crypto exchange FTX filed for US bankruptcy protection on Friday (Nov 11) and its founder Sam Bankman-Fried resigned as chief executive, after the biggest blowup in the crypto industry drew calls for tighter regulation.The distressed crypto trading platform had struggled to raise billions to stave off collapse as traders rushed to withdraw US$6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal this week.FTX, its affiliated crypto trading firm Alameda Research, and about 130 of its other companies have commenced voluntary Chapter 11 bankruptcy proceedings in Delaware, the company said in a statement on Twitter on Friday.It was an abrupt fall from grace for a company that was once a darling of the crypto industry.
FTX raised US$400 million from investors in January, valuing the company at US$32 billion. It attracted money from investors such as Singapore's Temasek and the Ontario Teachers' Pension Plan as well as celebrities and sports stars.Bankman-Fried, 30, known for his trademark shorts and T-shirt attire, has morphed from being the poster child of crypto's successes to the protagonist of the industry's highest-profile crash."The shock was that this guy was the face of the crypto industry and it turned out that the emperor had no clothes," said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
The week's turmoil hit already-struggling cryptocurrency markets, sending bitcoin to two-year lows. Bitcoin dropped after FTX's announcement and was down 4.3 per cent at US$16,803 on Friday afternoon.Shares of cryptocurrency and blockchain-related firms also dropped on the news.FTX's token FTT plunged 30 per cent on Friday to US$2.57, facing an 88 per cent
