FTX Implodes: Bankruptcy Filing Follows Widespread Solvency Rumors

FTX has filed for Chapter 11 bankruptcy in the US, along with 134 of its affiliated companies. This comes after over a week of rumors about FTX's solvency and a backtracked Binance-led acquisition.

Sam Bankman-Fried, FTX CEO and founder, has stepped down from his role as CEO and been replaced by John J. Ray II, a former Enron clean-up veteran. SBF had tweeted several times that the US entity would not be affected, but it is now included in the bankruptcy filing.

SBF apologized for the crisis engulfing FTX, tweeting 'I f***** up, and should have done better.' He admitted that he should have been more communicative and insisted that FTX International has a total market value of assets/collateral higher than client deposits. However, this is different from liquidity, which sparked withdrawal issues.

The US Justice Department, along with the SEC and CFTC, are reportedly launching investigations into the crisis engulfing FTX. The Wall Street Journal reports that SBF lent Alameda Research $10 billion in funds from FTX. Tether briefly lost its peg and slipped to $0.9815 before recovering.