FTX.com declares US bankruptcy: Chapter 11 protection requested. Bankman-Fried resigns

FTX.com officially announced, via a Tweet circulated in the afternoon, that 130 companies of the group (including FTX Trading, FTX US and Alameda Research) have started the procedure for declare bankruptcy in the United States. FTX CEO, Sam Bankman-Friedhas resigned and will be succeeded by John Ray.

“The immediate protection of the Chapter 11 appropriate to provide the FTX group with the opportunity to assess their situation and develop a process to maximize recoveries for stakeholders. The FTX Group has valuable resources that can only be effectively managed through an organized and joint process, “said the new CEO.

The bankruptcy procedure does not include LedgerX, FTX Digital Markets (the branch based in the Bahamas), FTX Australia and FTX Express Pay. There is no information in the announcement on a recovery plan for FTX investors.

It is good to remember that the US Chapter 11 one company reorganization procedure and not liquidation, with the main purpose of heal reality. At this point, the practice provides that in the immediate future a plan will be defined, directly by the company itself and approved by a judge, with a time schedule to restore the company and to get it out of bankruptcy status. In the event that the plan is not effective or is not respected, the judge can convert the status to Chapter 7, which effectively governs the liquidation procedure.