The platform announced on Friday that it has undertaken “the voluntary procedure” of the US bankruptcy law, shaken by revelations on its poor financial health made last week.
Le Monde with AFP and Reuters
It only took a week for this cryptocurrency giant to vacillate. The American platform FTX announced, Friday, November 11, initiate the procedure to be bankrupt, at the same time as the resignation of its general manager, Sam Bankman-Fried.
“ftx trading (…) and approximately one hundred and thirty companies affiliated with FTX Group have undertaken the voluntary procedure in chapter XI [of the American law on bankruptcies]”, in order to “assess and monetize [their] active” , announced FTX in a Communiqué Posted on Twitter. Among the subsidiaries of the company concerned by this procedure, the two cryptocurrency exchange platforms (FTX. US in the United States and FTX. Com in the rest of the world), as well as the Alameda Research investment fund .
In the wake of his resignation, Mr. Bankman-Fried was replaced at the head of FTX by John J. Ray III, the statement said. The ex-leader “will remain to help a transition in the rules”. According to his replacement, “the regime in chapter XI [of the American bankruptcy law] is appropriate to give FTX Group the opportunity to assess the situation and to set up a maximum investment return procedure for investors” .
Falling and failure of a buyout
occurred in less than a week, the fall in FTX has stunned the world of cryptocurrencies. It must be said that the group was until then considered the second largest platform in the world and a strongest player in the sector.
The rout was generated following revelations in the press, reporting poor management by FTX of its customers, as well as surveys engaged by the American authorities on the group’s financial health. The latter stressed that the platform needed $ 9.4 billion to straighten up.
Panic was added confusion. While its main rival, the Binance platform, offered to buy FTX on Tuesday, it finally retracted its offer the next day, as new elements were revealed. According to Binance, the problems encountered by FTX “have] [their] control or exceed [have] their ability to help”.
Until last Monday, FTX manager Sam Bankman-Fried, described criticisms on the financial health of his company “unfounded rumors” and assured that the group was doing well. But the clients of the platform heard it from another ear and started to massage their funds en masse. Mr. Bankman-Fried, known in Washington for his lobbying practice with elected officials, turned to his rival to try to save what could be of his group, in vain.
The case is also likely to feed doubts about financial health and viability of the entire “cryptos” sector, a few months after the collapse of the terrausd, a “stablecoin”, which had already led Several specialized companies on the verge of bankruptcy. Friday, one hour after the announcement of the bankruptcy placement of the FTX group, Bitcoin had lost almost 4 % of its value.