Bankruptcy

The exchange’s creditors haven’t been made whole despite a judge approving a plan, and sentencing for former executives is nearing an end.

On Nov. 11, 2022, then-FTX CEO Sam Bankman-Fried resigned, handing the company’s reins over to John Ray, who immediately filed for Chapter 11 bankruptcy protection in the United States. The day marked the beginning of the end of what was once one of the world’s most prominent and influential cryptocurrency exchanges. 

US authorities charged Bankman-Fried and four of his associates with fraud. FTX users and creditors saw billions of dollars worth of funds locked out of their reach in an exchange they weren’t sure would ever be able to repay them. Ray reported that the firm represented an “utter failure of corporate controls at every level of an organization,” later comparing its operations to a “dumpster fire.”

In addition to FTX’s impact on millions of users and its employees, many lawmakers and business leaders often seemed to use the exchange as a punchline when discussing crypto, having it represent one of the most egregious examples of illicit practices. The company declared bankruptcy amid a crypto market downturn that turned a lot of public opinion away from the industry as token prices crashed and many firms filed for Chapter 11. 

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