BREAKING: a few days ago CEO of FTX Sam Bankman-Fried, commonly referred to as SBF, filed for bankruptcy and personally owes lenders over $650 Million.
Following his collapse this week, the troubled cryptocurrency exchange FTX, short billions of dollars, has filed for bankruptcy protection.
Still unclear exactly what the extent of the damage is, and we will update you when more information comes—but it looks like FTX is filing for bankruptcy and asking for it’s protection. Which is essentially what happened in 2008 with large financial institutions and banks. Basically it states that FTX, while completely bankrupt, needs cash from the government because the government itself labels FTX such a critical part of the economy, that if they were to shut down completely would be worst off.
The Department of Justice and the Securities and Exchange Commission are looking into FTX and its CEO and founder Sam Bankman-Fried to see if any criminal behavior or securities crimes were committed. The DOJ and SEC official talked to The Associated Press under an anonymous name because they were unable to publicly share probe details.
The focus of the investigation is whether the company utilized customer money to finance wagers at Bankman-hedge Fried’s fund, Alameda Research. Brokers are required to keep client cash distinct from other firm assets in traditional markets. Regulators have the power to penalize violations.
After undergoing the cryptocurrency equivalent of a bank run, FTX decided earlier this week to sell itself to larger rival Binance. Customers left the exchange when they started to wonder if FTX had enough capital.
The cryptocurrency community had hoped that Binance, the biggest cryptocurrency exchange in the world, could be able to save FTX and its death hole cash problem. But after Binance took all of two seconds and looked at their books, ran away as fast as they could. Sending FTX to their impending death with no help in sight.
Terrible day to be SBF or anyone involved with FTX.