Staff Reports
Following the crisis at FTX, which resulted in the company's bankruptcy in the US, CEO Sam Bankman-Fried stepped down.
Due to the withdrawal of billions of dollars from the platform, it was unable to raise enough capital to continue operations.
FTX and several of its affiliated companies, including Alameda Research, filed for bankruptcy in the US on Friday.
In a series of tweets, Bankman-Fried expressed his regret about the company's situation.
In his tweets, Bankman-Fried stated that the bankruptcy filing didn't signify the end of the company's operations. He was also optimistic that the new CEO, John Ray III, would be able to provide the best possible solution for the company.
The week-long saga involving FTX and rival platform Binance has affected various cryptocurrencies. It has caused the price of bitcoin and other digital currencies to drop.
The company reportedly tried to raise around $9.4 billion from its various investors and competitors in order to continue operating.
In a memo sent to FTX employees, Ray noted that the bankruptcy filing allowed the company to assess its current situation and come up with a plan that would benefit its stakeholders. He also said that the bankruptcy filing would allow the company to move forward.
Some of the investors who invested in FTX, such as SoftBank and Sequoia, have already written off their investments. Anthony Scaramucci of SkyBridge Capital said that the firm is currently working on acquiring its FTX stake.
The developments have drastically affected the fortune of Bankman-Fried. Forbes estimated that he was worth around $17 billion two months ago.
After FTX filed for bankruptcy, the price of bitcoin fell to around $16,524. It then recovered some ground on Wednesday following the release of US inflation data.
The price of FTX, which is a cryptocurrency, fell 34% on Friday. It has lost almost 90% of its value during the past week. As a result, various regulators around the world have started to intervene.
A source close to the investigation said that multiple agencies, including the US Justice Department and the SEC, are looking into the operations of FTX.
On Friday, Cyprus' securities and exchange commission announced that it would cease operations of FTX on November 9.
Antoni Trenchev of crypto lender NEXO noted that FTX was already in trouble before Binance decided not to purchase it. He said that due diligence on the company lasted only 24 hours.
The second phase of the situation will determine the extent to which investors and other entities were exposed to the company and its operations.
The preceding is a summary of an article that originally appeared on The Daily Cable.
