By: Economic & Finance Report
Popular Crypto exchange company FTX (Futures Trading Exchange) filed for Chapter 11 bankruptcy on Friday, November 11, 2022. It was certainly the beginning of the end; during a week of turmoil for the cryptocurrency exchange. Sam Bankman-Fried stepped down as CEO, while John J. Ray III became the new CEO.
FTX saw their problems amplified when Mr. Bankman-Fried alerted investors that FTX had a $8 billion dollar shortfall and needed immediate funds to elevate the shortcomings; the company had incurred. He also told investors that FTX would need to file for Chapter 11 bankruptcy because of the outflow of money; that account holders were pulling out from the exchange.
FTX was the 3rd major cryptocurrency company to shut down in 2022. The Securities and Exchange Commission (SEC) is investigating FTX and Bankman-Fried’s Almeda Research; for any violations related to transfers of customer client funds in and out of FTX, to Almeda Research (FTX’s parent company). The SEC is investigating if FTX and Almeda placed outside bets using customer-clientele funds, which happens to be illegal. The collapse of FTX (Futures Trading Exchange) took down the cryptocurrency markets entirely; with many other crypto companies’ stock prices falling; along with the detrimental effects from FTX, within the past week. -SB
Image Source: Reuters