It’s important to note that the bankruptcy also concerns the US division of FTX. Apparently, the company’s management thought that there would be few people willing to interact with the exchange after what happened, so it would be cheaper to close it, and in this way.

However, this raises a lot of questions given Sam’s previous statements. Recall, only on Thursday – during his first apology – Bancman-Fried noted that there were no problems with FTX US. What’s more, it is allegedly 100 per cent liquid and any willing user can withdraw funds. Here is Sam’s relevant post.

Sam’s tweet about the liquidity of FTX US

Be that as it may, it didn’t last long.

What’s up with the FTX exchange

In the evening thread, Sam Bankman-Fried confirmed that he had filed under Chapter 11 of the US Bankruptcy Code. As Sam noted, this affected the international version of FTX, its US division, as well as trading company Alameda Research, founded by the entrepreneur.


Recall, it was the interaction with Alameda that turned out to be the downfall for FTX. As reported by sources, the management of the exchange transferred to Alameda for their trading operations more than half of its own assets. According to The Wall Street Journal, $10 billion was involved.


Sam’s remarks in the thread were not particularly meaningful. They mostly consisted of promises and statements about Bankman-Fried’s hopes for further improvement. Here is one of the entrepreneur’s remarks quoted by Decrypt.

Again, I apologise for putting us in this position. Hopefully a way will be found to normalise the situation. I hope it ends up with a certain transparency, trust and governance. In the end, I hope customers get something better.

Note that for users of other centralised cryptocurrency exchanges, the situation may indeed improve. Still, trading platforms have now taken to actively looking for a way to validate their own reserves, as well as matching them to the volume of their users' deposits. For example, cryptocurrency exchange Binance has already published a list of its own hot and cold wallets. In theory, an adequate implementation of this feature will restore users' shaken confidence.


Stablecoin USDT stock on the Binance exchange

Sam continues.

All this does not necessarily mean the end for companies or their ability to provide value and funds to their customers in the first place. In addition, such a thing can be coordinated with other actions.


That is, Sam believes that the companies in question will ostensibly continue to be able to provide value to their own users. However, why they should still have users after something like this is unclear.


Sam also added that he is going to clarify the situation immediately regarding the recovery of user assets.


There could be serious problems here. As Reuters noted today, sources close to the exchange reported at least one billion dollars of user funds missing from FTX. Apparently, they could also have been used for questionable trading or to help subsidiaries.


At the end of the track, Sam said he was shocked at how events had unfolded over the past week. Recall that in a previous track he noted that he had used user funds unintentionally and that company representatives had allegedly mis-signed the bank accounts. Given such an explanation, any Bankman-Fried remarks should hardly come as a surprise any more.

Sam’s June 27, 2022 tweet seems particularly amusing given what is happening. At that time he said that securing user assets should be the first priority and everything else secondary.

Sam’s archived tweet about the importance of protecting user assets

After Sam’s latest batch of tweets were published, the situation with his exchanges deteriorated. In particular, in the evening, the US division of FTX suspended user withdrawals.

Later, Ryan Miller of FTX US said that FTX and FTX US exchanges have moved their own assets to cold storage. This is to reduce risk.

Most members of the blockchain community, however, perceived what was happening as an exchange hack. There have also been reports of FTX allegedly being hacked, asking people to remove the exchange’s app and not to navigate to the platform’s website, as it may contain viruses.

Reports of an alleged FTX hack on Telegram


This seems to be the end of the FTX cryptocurrency exchange story. Obviously, users will have to wait for their own funds to be returned. However, when this will happen and to what extent is unknown.

It is important to note that the liquidators of the company in the event of liquidation will not take all the assets of the exchange and sell them overnight at the market rate on the exchanges. For this there will be a search for buyers, well large deals are likely to be done through OTC.


What do you think about what is happening? Share your opinion in our Millionaire Crypto Chat. We talk about other important topics there as well.

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