The House of Cards Has Crumbled: Crypto King Sam Bankman-Fried Resigns and Files Bankruptcy

Following days of turmoil in the cryptocurrency industry, tipped by purported mishandling of funds in FTX’s empire, CEO Sam Bankman-Fried resigned from his position at the second largest crypto company and filed Chapter 11 bankruptcy in a Delaware court.

Bankman-Fried is trying to cap his downfall and has appointed John Ray III as chief executive officer. Ray is known as a restructuring expert, serving as a lawyer in bankruptcies, including Enron Corp.

“The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders,” said the new FTX chief, Ray.

“The FTX Group has valuable assets that can only be effectively administered in an organized, joint process. I want to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholders that we are going to conduct this effort with diligence, thoroughness and transparency,” Ray said.

The 30-year-old Bankman-Fried once known as crypto king is now being investigated by US authorities for mishandling of funds, and the Securities Commission of the Bahamas froze his assets.

Bankman-Fried lost about 14 billion dollars in a matter of days and his empire fell from a $32 billion valuation to bankruptcy.

Anthony Scaramucci, a one-time Trump communications director, and an FTX investor said he flew to the Bahamas on Tuesday to meet with Bankman-Fried but the situation appeared irreparable.

“Duped I guess is the right word, but I am very disappointed because I do like Sam,” Scaramucci said on CNBC’s Squawk Box Friday morning. “I don’t know what happened because I was not an insider at FTX.”

“I don’t want to call it fraud at this moment because that’s actually a legal term,” Scaramucci said. “I would implore Sam and his family to tell the truth to their investors, get to the bottom of it.”