FTX fires three of its top executives

2 weeks, 2 days ago - November 19, 2022
FTX fires three of its top executives
Cryptocurrency exchange FTX begins strategic review, seeks court relief to pay critical vendors

FTX fires three of its top executives - WSJ

Cryptocurrency exchange FTX, which recently filed for U.S. bankruptcy court protection, has fired three of its top executives, including co-founder Gary Wang, the Wall Street Journal reported on Friday, citing an FTX spokeswoman.

The other fired executives were engineering director Nishad Singh and Caroline Ellison, who ran FTX's trading arm Alameda Research, the newspaper said.

The crypto exchange filed for bankruptcy protection last week and former Wall Street trader Sam Bankman-Fried resigned as chief executive after the rival exchange Binance walked away from a proposed acquisition.

The U.S. bankruptcy proceedings involve multiple FTX group companies with more than 100,000, and possibly over 1 million, creditors.

According to interviews with several people close to Bankman-Fried and company communications not previously reported, the company had been secretly taking risks with customer funds to prop up a trading firm owned by Bankman-Fried, which led to the company's collapse.

The company had come under some regulatory oversight through the dozens of licenses it picked up via its many acquisitions. But that did not protect its customers and investors, who now face losses totaling billions of dollars.

Several crypto firms have since been bracing for the fallout from the FTX collapse, with many counting their exposure in millions to the beleaguered exchange.

FTX begins strategic review, seeks court relief to pay critical vendors

Collapsed crypto exchange FTX said on Saturday it has launched a strategic review of its global assets and is preparing for the sale or reorganisation of some businesses.

FTX, along with about 101 affiliated firms, also sought court relief to allow the operation of a new global cash management system and payment to its critical vendors.

The exchange and its affiliates filed for bankruptcy in Delaware on Nov. 11 in one of the highest-profile crypto blowups, leaving an estimated 1 million customers and other investors facing total losses in the billions of dollars.

FTX will explore sales, recapitalisations or other strategic transactions for some of its units, the company's new Chief Executive officer John Ray said in a statement.

In a court filing on Saturday FTX asked for permission to pay prepetition claims of up to $9.3 million to its critical vendors after an interim order and up to $17.5 million after the entry of the final order.

The exchange said that if it fails to receive the requested court relief, it will result in "immediate and irreparable harm" to its businesses.

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

FTX has identified 216 debtor bank accounts with positive balances as of Nov. 16, but has only been able to verify the balances in 144 accounts so far, the company said in a separate court filing.

The company has appointed Perella Weinberg Partners LP as its lead investment bank to help with the sale process, subject to court approval.

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