FTX Encryption Exchange for Bankruptcy

FTX Encryption Exchange for Bankruptcy
Financial issuesNovember 11 22:50Updated on November 11 ’22 16:16author: Aaron Lopati

FTX, the once leading cryptocurrency exchange, has filed for bankruptcy in the United States. As a result, developments in the cryptocurrency trading venue moved very quickly, just a week ago it was announced that there were problems with liquidity.

FTX and dozens of its subsidiaries have opted to file for Chapter 11 bankruptcy in the US state of Delaware. This procedure allows companies that are no longer able to meet their financial obligations to remain active while they are in the process of restarting. The bankruptcy proceedings include crypto investment firm Alameda Research, which halted all activities earlier this week.

Earlier this week, it was announced that there are liquidity problems at another company of its founder Sam Bankman-Fried, Alameda Research. Then the problems there spread to his crypto exchange FTX, where the operation of the bank originated from users. However, clients used to spend a lot of money, which caused the exchange to get into big problems.

FTX, the once leading cryptocurrency exchange, has filed for bankruptcy in the United States. (ANP Press / Zuma)

It turns out that Binance is not a savior

The hope was that the largest cryptocurrency exchange Binance could come to the rescue. Initially, the exchange also had the intention of acquiring FTX, but after due diligence and investigations announced by the FSA, Binance withdrew its hand. Then it became clear that FTX had a shortfall of $7 billion.

Read also | Strange Crypto Crash: Trillions of Dollars in Smoke

The bankruptcy announcement also announced the resignation of founder Fred Bankman from the company. John Ray, FTX’s new CEO, says the company’s bankruptcy is necessary to take “steps forward.” The fall of FTX also caused a crash in the crypto markets. Major cryptocurrencies have seen a sharp drop in their value this week. Bitcoin, for example, is currently worth just over $16,500. A year ago the coin was still at its peak valued at over $68,000.

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