Crypto exchange seeks legal protection to pay critical vendors

Collapsed crypto exchange FTX has launched a strategic review of its global assets as part of preparations for a sale and a potential corporate restructuring.

The review was announced Saturday after FTX and 101 affiliates, including Alameda Research, filed for legal protection to help pay critical vendors.

The exchange and its affiliates filed for bankruptcy on Nov. 11 in one of the largest crypto implosions, causing around ONE million customers and investors to suffer billions in losses.

Bankman-Fried also stepped down as CEO and was replaced by restructuring expert John Ray.

In a court filing, FTX sought permission to pay $9.3 million in receivables to sellers and up to $17.5 million after the final order.

FTX claims that if the court dismisses the motion, it will result in “immediate and irreparable harm” to the company.

“Based on our review over the past week, we are pleased to learn that many of FTX’s regulated or licensed subsidiaries within and outside the United States have strong balance sheets, responsible management and valuable franchises,” said CEO John Ray.

“I respectfully ask all of our employees, suppliers, customers, regulators and government officials to be patient with us as we take the precautions that have prevented us from filing our Chapter 11 cases due to corporate governance failures at FTX. “

The move comes after former CEO Sam Bankman-Fried reportedly took a $300 million windfall last year when the exchange secured a $420 million round of funding from 69 different investors.

Of the total, $300 million went to Mr. Bankman-Fried after he sold a portion of his personal interest in FTX, citing financial records and people familiar with the transaction, The Wall Street Journal reported.

The diaryI said it was unable to determine what Mr. Bankman-Fried did with the $300 million — although a 2021 financial statement said the company used the funds for “operational expediency” on behalf of a “related party.” kept.

At the time, FTX was valued at a whopping $25 billion — a valuation that had completely evaporated until last week, when the platform abruptly declared bankruptcy.

Mr. Bankman-Fried’s personal fortune also plummeted from $16 billion to zero in a matter of days.

Mr. Bankman-Fried’s financial management will come under scrutiny following FTX’s bankruptcy announcement last week.

The ex-CEO funneled $10 billion in FTX client funds to Alameda Research — its sister cryptocurrency trading firm — and about $1 billion remains unaccounted for.

The doomed Bahamas crypto firm’s headquarters have also come under fire following speculation over executives’ sex lives and alleged drug abuse.

Mr Bankman-Fried and his former partner Caroline Ellison were reportedly part of a group of 10 that ran FTX and its sister cryptocurrency trading firm Alameda Research from a “luxury penthouse” in the Bahamas New York Post reports.

Ms. Ellison, the CEO of Alameda Research, admitted to “regular use of amphetamines” in an April 2021 tweet, while Mr. Bankman-Fried has been open about his experimentation with Adderall and other stimulants.

Originally posted as FTX seeks legal protection to pay critical vendors

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