CRYPTO KING FOLDS

FTX CEO out in Ch. 11

FTX filed for bankruptcy and announced the resignation of CEO Sam BankmanFried on Friday, marking a stunning downfall for the 30-year-old billionaire seen as one of the cryptocurrency sector’s most prominent figures.

FTX.com, FTX’s US operations, and BankmanFried’s cryptocurrency trading firm, Alameda Research, are among about 130 FTX Group companies covered by the bankruptcy filing, the company said in a statement.

“I’m really sorry, again, that we ended up here.” Bankman-Fried tweeted Friday. “Hopefully things can find a way to recover. Hopefully this can bring some amount of transparency, trust, and governance to them. Ultimately hopefully it can be better for customers.”

The worth of the crypto evangelist’s empire has plunged to about $1 billion after being valued at $32 billion as recently as January.

Bankman-Fried will be replaced as CEO by John Ray — a corporate restructuring expert who oversaw doomed energy giant Enron’s fall into bankruptcy.

“The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders,” Ray said in a statement.

“The FTX Group has valuable assets that can only be effectively administered in an organized, joint process. I want to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency,” Ray added.

Assisting transition

Bankman-Fried will remain as an adviser to “assist in an orderly transition,” the company said. Ray added that “many employees” will continue working under new leadership during the Chapter 11 bankruptcy proceedings.

“Ultimately I’m optimistic that Mr. Ray and others can help provide whatever is best,” Bankman-Fried said in a Friday tweetstorm.

FTX had scrambled to secure a bailout this week after a sudden liquidity crunch emerged and put the leading cryptocurrency exchange at risk of a complete collapse. Rival platform Binance initially agreed to buy the firm — only to back out of the nonbinding deal due to concerns about the company’s crippled finances.

The firm’s problems began after revelations that Alameda was heavily invested in FTT, a token issued by FTX. Panicked users and institutions began wondering if the platform was solvent, sparking a rush of withdrawals.