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CEO of FTX, resigns -DOJ investigates the reasons behind Binance's withdrawal from the transaction

After failing to obtain a rescue package, the troubled cryptocurrency exchange FTX has filed for bankruptcy in the US.

Sam Bankman-Fried, the company's founder and CEO, has also quit but will stay on to help with a smooth transition.


According to the Financial Times, FTX.US, its American subsidiary, Mr. Bankman-trading Fried's company Alameda Research, and over 130 related entities have filed for bankruptcy at a federal court in Delaware.


The company's newly appointed CEO, John J. Ray III, issued a statement in which he said: "The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximise recoveries for stakeholders."


US media firm Mashable revealed on Thursday that the US DOJ was looking into the decision by cryptocurrency exchange Binance to reject the opportunity to acquire FTX.


Authorities are said to have asked Binance for more details on what they found during their due diligence investigation into FTX.

Binance CEO Changpeng Zhao said earlier this week that the business has reached a non-binding agreement to acquire FTX, with the deal pending on the outcome of a due diligence investigation.


FTX and its clients were informed by Binance that it would be pulling out of the proposed arrangement due to "issues beyond our control or ability to help."


The likelihood of FTX CEO Mr. Bankman-trading Fried's company, Alameda Research, going bankrupt was reported last week. Following this, the platform saw a $6BN withdrawal.


The $10BN in loans that Alameda owes the cryptocurrency company were financed by deposits made by users of the cryptocurrency exchange.


The Financial Times only yesterday revealed that Mr. Bankman-Fried had contributed hundreds of millions of dollars to venture capital firms like Sequoia Capital, which supported the cryptocurrency exchange.


Following the revelation that the previous CEO had invested his "profits" in the venture capital supporters of the exchange, certain sources within the financial crime industry have questioned the firm's increased due diligence and AML checks on proof funds.

By fLEXI tEAM


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