©Reuters
Investing.com – Exchange FTX announced it had filed for official bankruptcy to protect itself from creditors, after much speculation about the company’s ability to continue, according to a statement posted by the company on its Twitter account.
It came after regulators froze some of the assets of struggling exchange FTX and its industry peers to limit losses on Friday amid worsening solvency problems and increased scrutiny from its CEO, Sam Bankman Fried .
The week-long saga that began with the exit of FTX, one of the largest cryptocurrency exchanges, and a botched takeover by arch-rival Binance has taken a toll on Coin and other already struggling tokens.
FTX is struggling to raise about $9.4 billion from investors and competitors, a source said Thursday, as the exchange urgently tries to bail out after a spate of customer withdrawals.
The problems seem to multiply for FTX. The Bahamas Securities Commission said Thursday it had frozen the assets of FTX Digital Markets, a subsidiary of FTX. Bankman-Fried is also under investigation by the U.S. Securities and Exchange Commission for possible securities law violations, according to an unverified tweet from a Bloomberg reporter.
case of bankruptcy
Largest cryptocurrency exchange Binance has pulled out of bailout of its giant FTX rival by former billionaire Sam Pinkman Fried.
“Our hope was to be able to support FTX clients to provide liquidity, but the issues are beyond our control or ability to help,” Binance, founded by Zhang Bing Zhao, said in a statement.
It became clear within hours that bailing out FTX would be a difficult task for Binance, as its executives found themselves staring into a financial black hole (the gap between liabilities and assets in FTX could be in the billions, perhaps more than $ 6 billion), according to Bloomberg, according to sources, and reviewed by “Al Arabiya.net”.
U.S. regulators have been looking into whether FTX was properly handling client funds, as well as its ties to other parts of Bank Fried’s crypto empire, including its trading firm Alameda Research, Bloomberg News reported on Wednesday.
Zhao himself admitted that there was no “master plan” to acquire FTX, as this leaves the fate of the beleaguered exchange and its customers uncertain, sparking renewed concerns about contagion risks in the cryptocurrency industry.
Digital assets are in decline again, with Bitcoin dipping below $16,000 following Binance’s announcement.
