“I’m sorry again that we ended up here,” Mr Bankman-Fried said on Twitter on Friday. “Hopefully this can bring some degree of transparency, trust and governance.”
The bankruptcy filing marks the beginning of what will likely be months or even years of legal ramifications as lawyers try to figure out if the stock exchange can ever continue operating in one form or another and demand compensation from clients. FTX has already been the target of investigations by the Securities and Exchange Commission and the Department of Justice, with the investigators focusing on whether the company misappropriated customer money to fund Alameda Research, a trading firm also owned by Mr. Bankman-Fried. established to support.
The bankruptcy filing included FTX, its US branch and Alameda. According to a simple legal filing with the US Bankruptcy Court in Delaware, FTX has assets valued between $10 billion and $50 billion, with the size of its liabilities in the same range. The company has more than 100,000 creditors, the filing said.
The bankruptcy is a stunning fall from favor for 30-year-old Mr. Bankman-Fried, who built a reputation as a boy genius with plenty of endearing quirks, including the habit of sleeping on a beanbag in the office. At one point, he was one of the wealthiest people in the industry, with an estimated net worth of $24 billion. He hobbled with actors, professional athletes and former world leaders.
Mr. Bankman-Fried’s crypto empire had an elaborate structure. The bankruptcy filing lists more than 130 corporate entities affiliated with FTX and Alameda. But in June, FTX only had about 300 employees, a point of pride for Mr. Bankman-Fried, who said he had resisted calls from venture capitalists to hire more staff.
“We told them that additional employees added too soon were net negative,” said Mr. Bankman-Fried said on Twitter in June. “They can take it or leave it.”
Unusually for a large start-up, none of FTX’s investors sat on the board of directors, which instead consisted of Mr. Bankman-Fried, another FTX director and a lawyer in Antigua and Barbuda.
FTX was based in the Bahamas, where Mr. Bankman-Fried and a small circle of top executives ran the business and lived together in a luxury resort. When the company collapsed this week, lower-ranking employees were confused and caught off guard, according to people familiar with the matter.
