The crypto wunderkind's $16-billion fortune has vanished along with his reputation as an industry savior and ambassador to Washington.
Sam Bankman-Fried’s digital-asset empire filed for Chapter 11 bankruptcy in Delaware, capping a rapid downfall for the 30-year-old entrepreneur and onetime crypto king.
More than 130 entities tied to FTX.com, FTX US and trading firm Alameda Research Ltd. were part of the filings, according to a Twitter statement Friday, with the Alameda petition alone listing assets and liabilities of at least $10 billion each. Chapter 11 bankruptcy lets a company continue operating while it works out a plan to repay creditors.
Bankman-Fried resigned as chief executive officer of the FTX Group as part of the filings, and John J. Ray III was appointed to replace him, the statement said. Ray, a turnaround and restructuring expert, has previously served senior roles in bankruptcies including Enron Corp.FTX this month after prices for the exchange’s native crypto token, FTT, plummeted and users raced to withdraw their assets.
Crypto assets dropped on the news, with bitcoin slumping as much as 8% before regaining some ground. Ether and smaller tokens also declined. Solana, which was backed by Alameda, tumbled 10%. FTX’s implosion came almost exactly one year after bitcoin peaked at around $69,000. BlockFi, a troubled crypto lender that received emergency financing from FTX US earlier this year, on Thursday said it will pause client withdrawals citing “a lack of clarity” over the status of Bankman-Fried’s empire.
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