On Nov. 11, 2022, the once-third-largest cryptocurrency exchange, FTX, announced that it filed for bankruptcy protection along with approximately 130 additional affiliated companies. According to reports, CEO and founder Sam Bankman-Fried has stepped down and will be replaced by John Ray III, a turnaround veteran who participated in the Enron bankruptcy.
This week, multiple reports have been released highlighting attempts by FTX to achieve a bailout of over $1 billion before receiving a nonbinding letter of intent from fellow cryptocurrency exchange Binance. Binance reportedly neglected to move forward after an initial review of FTX's books and amid concerns that FTX was the subject of governmental investigations. One report explained that the problems began when Binance started to offload hundreds of millions of dollars of FTT, a token created by FTX, on Sunday. According to the report, FTX's legal and compliance staff quit shortly thereafter. Another report indicated that FTX was already the subject of probes from state and federal regulators, and that the U.S. Department of Justice (DOJ) may have opened an investigation into FTX related to its recent liquidity issues.
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