One of the world’s largest trading platforms for cryptocurrency exchange FTX filed for bankruptcy last week following suspicious unauthorized transactions at the firm.
The firm filed for a chapter 11 bankruptcy as a precautionary step to move all digital assets to a cold storage to mitigate damage.
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Top boss Sam Bankman-Fried also known as SBF resigned from his CEO post at FTX.com following probes into his role in an alleged multibillion-dollar scandal.
John J. Ray III has been appointed CEO of the FTX Group.
Bankman-Fried stay’s on as part of the group to assist in an “orderly transition.”
Here is a press release that will shortly be published by the main FTX twitter account. Sharing here in interest of time. pic.twitter.com/DxOZmy0aiu
— Ryne Miller (@_Ryne_Miller) November 11, 2022
Binance following a wave of withdrawals including a series of events at FTX offered a package to rescue FTX from it’s liquidity issues.
Binance quickly did a u-turn to say a series of news pointing to mishandled customer funds and alleged U.S agency investigations pointing to FTX have led to it’s decision against the acquisition.
FTX is no longer a trillion dollar market after reports allege the Bankman-Frieds’ crypto trading firm was dependent on FTX token, FTT.
This led to Binance CEO Changpeng Zhao stating that his firm would liquidate it’s holdings of FTT due to recent events.
What made investors edgy sending stock prices plummeting was reports over the weekend that FTX had detected unauthorized transactions in which hundreds of millions of dollars of digital assets were moved from the platform, under questionable circumstances.
Reports claim some FTX top executives were aware of Bankman-Frieds decision to move customer funds to Alameda research.
While a tally of losses remains unknown, ongoing updates in reports signal transaction losses to be as high as $ 600 million.
FTX’s US counsel Ryne Miller sharing updates on Twitter said the firms digital assets were being moved into a so called cold storage to mitigate damage following unauthorized transactions.
“Consistent with their obligations as Chapter 11 Debtors-in-Possession, FTX US and FTX [dot] com continue to make every effort to secure all assets, wherever located.
“Among other things, we are in the process of removing trading and withdrawal functionality and moving as many digital assets as can be identified to a new cold wallet custodian. As widely reported, unauthorized access to certain assets has occurred.” .
He added: “An active fact review and mitigation exercise was initiated immediately in response. We have been in contact with, and are coordinating with law enforcement and relevant regulators. (Statement from John Ray, Chief Restructuring Officer and CEO of FTX.”