FTX Group reported on Friday that it filed for bankruptcy in the US and that its CEO resigned,
marking a spectacular fall for one of the largest and strongest players in the crypto industry.
FTX has said Sam Bankman-Fried, the 30-year founder of the fellowship, will remain to help an orderly transition. In his position, it was John J. Ray III, the lawyer who oversaw the liquidation of Enron. A number of employees are expected to remain at the helm of the company in Chapter 11.
“I’m really sorry, again, that we ended up here,” Bankman-Fried wrote in a Twitter thread Friday. “Hopefully, things can find a way to recover.”
Bankruptcy proceedings include FTX US, FTX’s Alameda cryptographic hedge fund, and about 130 other sister companies.
Ray said bankruptcy protection will give the FTX an opportunity to do so.
“assess its situation and develop a process to maximize recoveries for stakeholders.”
On Friday, Mark Cuban spoke at a conference hosted by the Sports Business Journal, and told Bankman-Fried:
“First, you’ve got to understand crypto. There’s speculation—that’s all the noise. Then there’s things that have happened with [crypto platform] Voyager and with FTX now—that’s somebody running a company that’s just dumb as f*** greedy. So, what does Sam Bankman do? He just, give me more, give me more, give me more, so I’m gonna borrow money, loan it to my affiliated company, and hope and pretend to myself that the FTT tokens that are in there on my balance sheet are gonna sustain their value.”
Cuban was accused in a lawsuit in August of deceiving investors by signing up for accounts with Voyager Digital, a cryptographic platform that filed for bankruptcy in July.
On Saturday afternoon, Cuban tweeted, “Everyone is saying that crypto is unregulated. Not true The SEC says that they regulate crypto. Ask Kim Kardashian and the tokens they have sued or settled with. The question is, given the visibility of the central exchanges , why hasn’t the SEC already knocked on their doors ?”
Cuban is referring to the over-million dollar settlement Kardashian had to pay for promoting crypto on her Instagram account last month.
Last week, SEC Commissioner Hester Peirce spoke about FTX and crypto:
“The questions around lack of jurisdictional clarity are partly our fault,” says Peirce.
“That doesn’t mean just bringing enforcement actions,” Peirce said, “but we also need to know, thinking about this as a society, how do we want to regulate this thing.”