FTX to File for Bankruptcy in the US, CEO to Exit

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SINGAPORE/LONDON — Crypto exchange FTX is to file for bankruptcy protection in the United States and chief executive Sam Bankman-Fried is to step down, after a liquidity crunch at the cryptocurrency group caused the involvement of regulators around the world.

The beleaguered cryptocurrency trading platform is struggling to raise billions in funds to avoid collapse while facing increased regulatory scrutiny.

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The company said in a statement Friday, shared via tweet, that FTX and its affiliate crypto trading fund Alameda Research and about 130 other companies have begun voluntary Chapter 11 bankruptcy proceedings in Delaware.

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John J Ray III has been appointed Group CEO. Bankman-Fried has resigned but will help with an orderly transition.

The week-long saga that began with a run on FTX and a scrapped buyout deal by rival Binance has hit already struggling bitcoin and other tokens.

FTX was struggling to raise about $9.4 billion from investors and rivals, Reuters reported citing sources, as the exchange sought to bail out after client withdrawals.

The predicament marks a quick turnaround for Bankman-Fried, the 30-year-old crypto executive, whose wealth was estimated by Forbes at around $17 billion just two months ago.

(Additional reporting by Rae Wee in Singapore, Hannah Lang in New York, David Shepardson in Washington, Aishwarya Nair in Bangalore, Georgina Lee in Hong Kong, Elizabeth Howcroft and Alun John in London and Jasper Ward in the Bahamas; Editing by Sam Holmes and Jane Merriman)