Crypto Exchange FTX Files For Bankruptcy By

© Reuters – The FTX Stock Exchange announced that it has filed for formal bankruptcy to protect it from creditors, after much speculation about the company’s ability to continue, according to a statement posted on its Twitter account.

It came after regulators froze some assets of troubled exchange FTX and its industry peers to limit losses on Friday amid worsening solvency problems at the company and heightened oversight of its chief executive, Sam Bankman-Fried.

This week-long saga that began with the exit of FTX, one of the largest cryptocurrency exchanges, and a failed takeover by arch-rival Binance, affected the already struggling coin and other tokens.

A source said Thursday that FTX is scrambling to raise about 9.4 billion from investors and competitors, as the exchange urgently seeks to save itself after a rush of customer withdrawals.

The problems seem to multiply for FTX. The Bahamas Securities Commission said Thursday that it has frozen the assets of FTX Digital Markets, a subsidiary of FTX. Bankman-Fried is also under investigation by the US Securities and Exchange Commission for possible violations of the securities law, according to an unverified tweet by a Bloomberg reporter.

bankruptcy case

The largest crypto exchange Binance has pulled out of the rescue plan of its giant rival FTX of ex-billionaire, Sam Pinkman Fried.

“Our hope was to be able to support FTX clients to provide liquidity, but the issues are beyond our control or our ability to help,” Binance, which was founded by Zhang Bing Zhao, said in a statement.

It became clear within hours that rescuing FTX would be a difficult task for Binance, as its executives found themselves staring into a financial black hole (a gap between liabilities and assets in FTX could be in the billions, possibly more than $6 billion), according to Bloomberg. According to sources, and reviewed by “Al”.

US regulators have been seeking to verify whether FTX properly handled client funds, as well as its ties to other parts of Bankmanfried’s crypto empire, including his trading company Alameda Research, Bloomberg News reported on Wednesday.

Zhao himself admitted that there was no “master plan” to acquire FTX, as this leaves the fate of the beleaguered exchange and its clients uncertain, sparking renewed concerns about the risks of contagion across the crypto industry.

Digital assets are falling again, with Bitcoin dropping below $16,000 after the Binance announcement.

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