FTX, the beleaguered crypto exchange, filed for bankruptcy protection in the US on Friday, with its founder and CEO Sam Bankman-Fried putting in his papers. The firm landed into trouble due to a liquidity crunch. The bankrupcy decision came after rival Binance, the world’s largest crypto exchange, pulled out of an acquisition deal on Thursday, after what it said a review of the company’s finances, reports said.
On November 12, Sam Bankman-Fried appeared to take an aircraft to Argentina and it became the most searched flight, as per flight tracking site Flightradar24. According to data provided by the site, the FTX founder’s flight had been tracked nearly 9,000 times by around 2.30 pm.
Argentina would, however, be an unlikely destination given the country’s extradition rules.
Most tracked flight right now – https://t.co/g65UMuTWD8
According to tweets the founder and former CEO of @FTX_Official is en route to Argentina after the FTX collapse earlier this week. pic.twitter.com/e42sI7Huto
— Flightradar24 (@flightradar24) November 12, 2022
The 30-year-old secretly moved $10 billion in client cash from FTX to Bankman-Fried’s firm Alameda Research. The financial gap was exposed in documents supplied by him with other top executives last Sunday, news agency Reuters reported.
The exclusive report by Reuters said Thursday FTX’s downfall was the result of mistakes made by the Sam Bankman-Fried after he stepped in to save other crypto firms as the market collapsed amid rising interest rates. The report attributed several people close to Bankman-Fried as saying that some of those deals involving his trading firm, Alameda Research, led to a series of losses to the firm.
On Tuesday, Bankman-Fried reportedly told employees: “I’m sorry, I f****d up.”
The issue accelerated a week ago when the CEO of the major exchange, Binance, said they will liquidate their holdings of FTX’s proprietary coin FTT.
In his bankrupcy plea, FTX has asked for judicial protection, while also seeking a means to restore money to consumers, BBC reported.
ALSO READ: Crypto Major Binance Backs Out Of Deal To Buy Rival FTX
Customers were unable to access their assets in the majority of cases. Then there were reports of NFTs and cutouts being used to withdraw cash in the Bahamas.
Apparently this is a Bahamas account withdrawing other people’s funds for them.
They are likely bypassing the internal balance transfers block by selling NFTs on FTX’s NFT marketplace — eg. Bahamas account creates an NFT, the stuck user buys the NFT with their full balance. https://t.co/VphzwQprdQ
— Cobie (@cobie) November 11, 2022
Bankman-Fried stated in a tweet on Friday that he was “piecing together” what had transpired at FTX. “I was shocked to see things unravel the way they did earlier this week,” he wrote. “I will, soon, write up a more complete post on the play-by-play.”
5) I’m piecing together all of the details, but I was shocked to see things unravel the way they did earlier this week.
I will, soon, write up a more complete post on the play by play, but I want to make sure that I get it right when I do.
— SBF (@SBF_FTX) November 11, 2022
The collapse of FTX was a dramatic setback for Bankman-Fried. The 30-year-old founded FTX in 2019 and guided it to become one of the largest cryptocurrency exchanges, amassing a personal wealth of about $17 billion.
In January, FTX was valued at $32 billion by investors including SoftBank and BlackRock. The crisis has reverberated throughout the crypto industry, with major coin prices dropping. And FTX’s collapse is being compared to other catastrophic company meltdowns, Reuters reported.
(With Inputs From Agencies)
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