Sam Bankman-Fried, the Chief Executive Officer of troubled cryptocurrency exchange FTX has resigned after the firm filed for Chapter 11 bankruptcy in the United States. Interestingly, this marks the fall of one of crypto’s largest behemoths and his suite of high-ranking businesses including his crypto exchanges MD trading ventures.
Effective immediately, John J. Ray III the experienced attorney and chief restructuring officer who led bankruptcy proceedings for Enron in the early-mid-2000s will replace Bankman-Fried in FTX. Although, the former CEO is very much around for the transition. So far, about 130 other affiliated companies are part of the FTX bankruptcy process.
This is a significant turnaround for Sam Bankman-Fried who had so much enthusiasm about the crypto industry in the middle of the year.
In July, Bankman-Fried announced that the company had a few billion to assist falling cryptocurrency exchanges that had been hit by the Terra/LUNA crash and the prevalent extreme market conditions. At that time, he believed that the worst of the liquidity crunch had passed.
FTX Saves Other Troubled Crypto Firms
As part of its ‘saviour’ plans, FTX offered troubled crypto lender Voyager Digital a $200 million credit facility. Another lending protocol BlockFi received a $250 million revolving credit to bolster its operations before it was eventually acquired by FTX at $15 million.
Also, SBF became a self-appointed crypto industry ambassador to Washington. So far, he has given close to $40 million to Political Action Groups (PACs) including $27 million to the Protect the Future PAC
He once pledged transparency and cooperation to advocate for a bipartisan Senate bill that would hand over significant crypto authority to the Commodity Futures Trading Commission (CFTC). At one time, Bankman-Fried announced that he was giving away his crypto earnings of up to $24 billion. Now, with the crash of FTX, he has many regulators and law enforcement agencies on his tail seeking answers to the liquidity crunch.
California’s Department of Financial Protection and Innovation (DFPI) has opened an investigation into FTX and its connection with other SBF-owned businesses and subsidiaries. The United States Securities and Exchange Commission (SEC) and CFTC are equally running an investigation on FTX mismanagement of customers’ funds..