More Than 130 FTX Group Companies File for Bankruptcy

FTX Group companies have filed for bankruptcy protection after a tumultuous week that included news of a liquidity crisis, investigations by United States regulators and the swift cancellation of a possible acquisition by rival cryptocurrency exchange Binance.

The FTX Group companies beginning voluntary Chapter 11 proceedings in the U.S. include FTX.com, FTX US, Alameda Research and about 130 other affiliated companies, FTX.com said in a press release posted by its Twitter account Friday (Nov. 11).

Press Release pic.twitter.com/rgxq3QSBqm

— FTX (@FTX_Official) November 11, 2022

John J. Ray III has been named CEO of the FTX Group, while former CEO Sam Bankman-Fried has resigned that role but will remain with the company to aid in the transition, according to the release.

Many employees of the FTX Group are expected to remain in their roles and assist with the Chapter 11 proceedings, the release stated.

“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 the release. “The FTX Group has valuable assets that can only be effectively administered in an organized, joint process.”

Ray said in the release that the company will apply diligence, thoroughness and transparency throughout the process, and that stakeholders wanting more information should review materials filed on the docket of the proceedings in the coming days.

Some subsidiaries are not included in the Chapter 11 proceedings; among them are LedgerX, FTX Digital Markets, FTX Australia Pty and FTX Express Pay, according to the release.

As PYMNTS reported Thursday (Nov. 10), the week’s news around the FTX collapse has included reports that it was set in motion by the platform loaning billions of dollars to sister company Alameda Research in a bid to prop it up, that federal regulators are investigating FTX for possible mishandling of customer funds and its relationship with Alameda, and that rival crypto trading platform Binance walked away from a deal to acquire FTX after conducting just two days of due diligence.

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