However, Neal will not be taking over. saying that he is “unable to serve in that position for reasons having nothing to do with FTX, Inc. or its former CEO.”
The negative ripple effect across the industry started last night with Blockfi, another crypto services firm, freezing customer withdrawals as a result of the FTX problems. After the announcement, the price of Bitcoin dropped sharply before recovering slightly and remains under the $17,000 mark.
In a thread posted today, SBF said, “I was shocked to see things unravel the way they did earlier this week. I will, soon, write up a more complete post on the play by play, but I want to make sure that I get it right when I do.”
A liquidity crunch spurred by CoinDesk’s report about the arrangement, and a statement from Binance founder Changpeng Zhao saying he planned to sell his cache of FTX’s crypto token, caused a liquidity crunch exposing a reported $8 billion hole in the beleaguered company’s balance sheet.
In a note posted to the company’s Twitter account, it said Bankman-Fried would stick around to participate in an “orderly transition.” We’ve already seen investors in FTX like Sequoia mark down the value of their holdings to $0 as everyone waits to find out if there will be anything of value left. On Friday morning, the Mercedes AMG F1 team announced a suspension of its sponsorship deal with FTX, although there’s no word yet about other sports partnerships, like its naming rights on the Miami Heat basketball arena.
Newly appointed CEO John J. Ray III is quoted saying, “The FTX Group has valuable assets that can only be effectively administered in an organized, joint process. I wanted to ensure every employee, customer, creditor, contract party, stockholder, investor, governmental authority and other stakeholder that we are going to conduct this effort with diligence, thoroughness and transparency.”
Update November 11th, 10:55AM ET: Added bankruptcy filing, tweets from Sam Bankman-Fried, and noted that Sir Lewis Hamilton’s F1 car will not bear FTX branding at this weekend’s upcoming race.
Update November 11th, 6:42PM ET: Updated to note that Neal will not become chairman of FTX as proposed.