FTX files for bankruptcy, as Sam says that he is "really sorry" for all that's happened.
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FTX declares bankruptcy, SBF resigns ⚠️
After over a week of rumors about FTX’s solvency, along with one backtracked Binance-led acquisition, the crypto exchange and 134 of its affiliated companies has filed for Chapter 11 bankruptcy in the U.S. Notably, FTX US is included in the bankruptcy filing, even after FTX CEO and founder Sam Bankman-Fried had tweeted several times that the U.S. entity would not be affected. Bankman-Fried has also stepped down from his role as CEO, and has been replaced by John J. Ray II — the former Enron clean-up veteran.
Sam Bankman-Fried: 'I f***** up' 🚨
Before the bankruptcy filing today, Sam Bankman-Fried had apologized for the crisis engulfing FTX, tweeting: "I f***** up, and should have done better." In a lengthy Twitter thread yesterday, the embattled CEO admitted that he should have been more communicative. He insisted FTX International "currently has a total market value of assets/collateral higher than client deposits" — but this is different from liquidity, sparking withdrawal issues. After vowing that his main priority was to do right by users, SBF has now resigned his role in FTX Group and will remain only to assist in the transition process.
The walls are closing in on FTX 📉
Even after today’s bankruptcy filing, there are many angles to this story. The Wall Street Journal reports that SBF lent Alameda Research $10 billion in funds from FTX. The U.S. Justice Department, along with the SEC and CFTC, have reportedly launched investigations into the crisis engulfing the exchange. CoinDesk reported on Thursday that a few users had been able to withdraw funds from FTX, but it's not clear that this is broadly available as FTX's website still says it cannot process withdrawals. To make matters worse, the damage has spread into the wider industry — with Tether briefly losing its peg and slipping to $0.9815 before recovering.
BlockFi once again halts withdrawals ❌
Troubled crypto lender BlockFi, which escaped bankruptcy this summer after a $400 million loan from Sam Bankman-Fried's now-insolvent FTX exchange, has once again halted withdrawals. Citing the "lack of clarity on the status of FTX," BlockFi asked clients not to make deposits to their BlockFi Wallets or Interest Accounts. It warned: "We are not able to operate business as usual… Until there is further clarity, we are limiting platform activity, including pausing client withdrawals." The announcement amounts to a harsh full circle for BlockFi, as well as a humiliating turnaround for SBF. Just five months ago, he was presented as a savior of wounded crypto firms in glowing interviews by The New York Times and Wall Street Journal.
OpenSea to collect royalties for all sales 💰
Top NFT marketplace OpenSea has said it will collect creator royalties for all sales on its platform. The Ethereum-based marketplace caused an uproar earlier in the week after it announced plans to buck the trend that caused most of its biggest competitors to announce that they would stop collecting the resale royalties most artists attach to their NFT creations — but only for new collections. Those generally amount to 5% to 10% of secondary sales. The issue has become a battle in the last few months, as new marketplaces that advertised that they would not collect royalties began taking significant market share from more established exchanges.
