FTX Bankruptcy

FTX Trading Ltd. and its numerous affiliates (collectively, FTX) operated one of the world’s largest and most recognizable cryptocurrency platforms thanks in part to its aggressive advertising campaigns.

What Happened?

In the days prior to FTX commencing its bankruptcy cases on November 11, 2022, FTX enjoyed positive public perception and had just been approved to buy substantially all the assets of bankrupt cryptocurrency company Voyager. On November 6, 2022, Binance announced that it was liquidating its substantial holdings in FTT (FTX’s digital token), indicating Binance’s loss of faith in FTT. This led customers to rapidly withdraw their holdings, causing FTX to freeze customer withdrawals and authorities in the Bahamas to open investigations into FTX. FTX ultimately filed chapter 11 bankruptcy petitions on behalf of 102 entities and chapter 15 petitions on behalf of several other entities with liquidation proceedings ongoing in the Bahamas. Contemporaneous with its bankruptcy filings, FTX’s founder and CEO, Samuel Bankman-Fried, resigned and was replaced by a seasoned bankruptcy professional who is leading an investigation and accounting into FTX’s transactions and business practices.