FTX files for bankruptcy

I hope that the winter is over. Don't expect your hopes to come true. One of the largest exchanges has filed for Chapter 11.

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FTX announced in a press release that it would be filing for Chapter 11. The exchange's global trading operations are also covered by FTX.com. FTX's U.S. affiliate, FTX US, is included in the bankruptcy.

FTX founder and CEO Sam Bankman- Fried often stated that FTX US's operations were unaffected by the turmoil at FTX.

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SBF has left the company. John J. Ray III will become CEO. He was brought in to clean up Enron after the energy trading company collapsed.

Last week, two journalists, Ian Allison of CoinDesk and the anonymous Mike Burgersberg of the newsletter Dirty Bubble Media, reported that SBF's trading firm, Alameda Research, was likely to be in trouble. FTX's own token was the majority of the company's assets.

The majority of Alameda's assets were in FTX's own token and there were clear liquidity problems. Burgersberg questioned if SBF's empire was actually bankrupt. According to the Wall Street Journal, Alameda owed $10 billion to FTX for loans that were funded by deposits.

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Changpen Zhao, also known as CZ, the founder of the world's largest digital currency exchange, announced that his company would be selling off its holdings after hearing about Alameda. Users attempted to withdraw $6 billion from FTX within 72 hours.

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On Tuesday, one of FTX's biggest competitors announced it had entered a non-binding agreement to bail out FTX. This would have been a fire sale of a company that was in talks to raise $1 billion at a valuation of $32 billion less than two months ago.

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By Wednesday, it was revealed that the acquisition of FTX would not go ahead. The issues are not within our control or ability to help, according to the company. The U.S. Department of Justice and other regulatory agencies have reached out to the company in order to find out what made them walk away from the deal.

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SBF continued to claim that FTX US was not affected by the situation at FTX and Alameda even after all of this happened. FTX US is part of the filing.

There will be repercussions across the industry.

Terra and its sister token Luna failed in the beginning of the year. Multiple firms went under because of it. The reality is that the industry should be preparing for a very long winter if it was hoping for a bright future.