Sam Bankman-Fried in a black suit staring off to the side.

FTX, it's time to say goodbye. Chapter 11 is a type of reorganizational bankruptcy. Also involved in the proceedings are CEO Sam Bankman-Fried and his other firm, Alameda Research.

The supposed wunderkind Bankman-Fried, once considered one of the top minds in the sphere, also announced he was vacating his chair as CEO, and that John Ray III is stepping up as head honcho Many employees of the FTX Group in various countries are expected to continue.

Most FTX users can't withdraw their funds from the exchange. Ray said in the release that stakeholders should know that events have been fast- moving and the new team is only recently engaged. Thousands of FTX users who had millions of dollars stored on the FTX exchange are not likely to be reassured by that.

What happened to this all start? The report made it clear that FTX had been printing money using its own FTT token to prop up Bankman-Fried's own firm. According to The Wall Street Journal, FTX used customer's money to fund their own trading endeavors. Bankman-Fried used half of the customer assets under FTX's control to invest in riskycryptocurrencies. Bankman- Fried bought up the assets of failed ventures like Celsius and Voyager.

FTX faceplanting into a multi-billion dollar hole that it has not been able to pull itself out of was caused by the price of the exchange's native coin falling.

The exchange used to be the third largest by market cap. The Securities Commission of the Bahamas froze all of FTX's assets. The company's official registration was suspended by the country.

The Commission is aware of public statements that suggest that clients assets were mishandled. The Securities Commission wrote that the actions would have been contrary to normal governance and could have been illegal.

Bankman- Fried said he fucked up and should have done better. He overstated the margins for users on FTX. Even though he might be placing the blame on himself, the US Department of Justice and The Securities and Exchange Commission will still be looking into the matter.

BlockFi is Caught Up in FTX’s Failure

The collapse of the FTX exchange is similar to the collapse of the Terra stable coin seven months ago. BlockFi said they were stopping withdrawals.

Until there is further clarity from the collapse of Sam Bankman-Fried's FTX and Alameda Research, the company was keeping all of the digital currency on their platform, according to the company. Users were asked to not deposit any more money into their BlockFi wallet until they could sort out the mess.

The company said that they were like the rest of the world in that they found out about the situation through social media.

In its second quarter earnings report, BlockFi said they had $3.9 billion in client assets housed under their roof, but it's hard to tell how much of it is in cryptocurrencies. According to a source with knowledge of the matter, BlockFi was working to transfer most of its assets to FTX for custody. The source did not say how much the company gave to Alameda.

The company cut 20% of its staff earlier this year. The exchange received $250 million in credit from FTX. Bankman- Fried said his company was partnering with BlockFi so they could navigate the market from a position of strength. He said that BlockFi was trying to get new cash flows before it was needed.

A Few Crypto Folks Considered Propping Up FTX

After looking at its rival's balance sheets and smelling something not quite right, Binance tanked the deal it was supposed to buy out FTX for. The founder of TRON and its cryptocurrencies stepped up to help the failing company. According to Sun, they might be able to provide billions of dollars in aid to the FTX.

Sun struck a deal with FTX that allowed its token holders to withdraw their funds even though the exchange is closed to withdrawals. According to a report from CoinTelegraph, users were trying to get their token off the sinking ship that is Bankman-Fried's prized exchange.