FTX Cryptocurrency Exchange collapse: From crash to bankruptcy, what we know so far?

Crypto exchange FTX filed for US bankruptcy proceedings on November 11 and Sam Bankman-Fried stepped down as CEO, after a rapid liquidity crisis at the cryptocurrency group that has prompted intervention from regulators around the world. The distressed crypto trading platform had been struggling to raise billions in funds to stave off collapse after traders rushed to withdraw $6 billion from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal.

The company said in a statement shared on Twitter on Friday that FTX, its affiliated crypto trading fund Alameda Research and approximately 130 other companies have commenced voluntary Chapter 11 bankruptcy proceedings in Delaware. John J. Ray III has been appointed to take over as CEO from Bankman-Fried, the statement said.

"This means the end of FCX in its current form and obviously under its current leadership," said Alex Zerdin, and founder and Principal at Capital Peak Strategies and a senior fellow at the Center for a New American Security. "FCX may be able to reconstitute itself in some other shape or form on the far side of its bankruptcy proceedings. However, that is is unlikely."

The week's turmoil hit already-struggling cryptocurrency markets, sending bitcoin to two-year lows. Bitcoin dropped after FTX`s announcement, down 3.9% on Friday at $16,816 by 1603 GMT.

Shares of cryptocurrency and blockchain-related firms also dropped on the news.

Press Release pic.twitter.com/rgxq3QSBqm — FTX (@FTX_Official) November 11, 2022

"This is not going to be the last bankruptcy, the last insolvency in the crypto ecosystem," Zerdin said. "Unfortunately, other companies are likely going to be impacted by the collapse of FCX and broader market conditions right now."

FTX`s token FTT plunged 30% on Friday to $2.57, facing an 88% weekly loss.

FTX`s collapse also led to the spectacular fall in the fortune of its founder Bankman-Fried, whose net worth was estimated as high as $26.5 billion by Forbes a year ago.

"I`m really sorry, again, that we ended up here," said Bankman-Fried in a series of tweets after the commencement of the bankruptcy filing.

FTX is under investigation by the U.S. Securities and Exchange Commission, the U.S. Justice Department, and Commodity Futures Trading Commission, according to a source familiar with the investigations.