A lot can change in a week. One day, you’re running one of the world’s largest crypto exchanges, rubbing shoulders with Tom Brady, and being touted as the “king” of your industry. The next, you’re giving up your job at the helm and signing US bankruptcy papers.
Driving the news: That's the position Sam Bankman-Fried, or SBF, the former CEO of FTX found himself in this week, after a day that “capped the downfall of one of crypto’s wealthiest and most influential moguls and his collection of high-flying ventures,” per Bloomberg.
After facing a cash shortfall of $8 billion and scrambling to drum up money, the company filed for what will be the biggest bankruptcy in the US this year.
- John J. Ray III, a turnaround and restructuring expert who worked on the fall of Enron, has been appointed to replace SBF, according to a Twitter statement.
Why it matters: The fall of FTX not only affects investors (which poured $2 billion into the company since 2020) and users (who executed over $700 billion in trades in 2021), but casts a dark cloud over crypto just as SBF was paving the way for mainstream recognition.
- A court will now weigh in on how to handle the interests of customers, creditors and business partners involved with all the 130 entities linked to the filing.