Facing the digital equivalent of a banking collapse, the financially troubled cryptocurrency exchange FTX filed for US bankruptcy protection on Friday.
Bitcoin fell to a two-year low this week after a week of reports regarding the platform's financial difficulties, and by Friday night, the price of the cryptocurrency was trading at $16,861 (€16,256).
The company revealed that Sam Bankman-Fried, its former CEO, has also left after a remarkable turn of events at the second-largest cryptocurrency exchange in the world. His FTX empire crumbled in a little more than a week, shattering trust in the already unstable cryptocurrency market.
Coindesk and customer reports on social media claim that the unstable platform has finally permitted some users to withdraw money for the first time in days.
Summary of FXT company
According to a tweet from the company, FTX, Alameda Research, a cryptocurrency trading company that is linked with it, and roughly 130 of its other businesses have started voluntary Chapter 11 bankruptcy procedures in Delaware. In the US, a firm can use Chapter 11 to reorganize its debts while still operating under court supervision.
FTX Trading claimed in its bankruptcy filing that the firm has assets worth between $10 billion and $50 billion, liabilities between $10 billion and $50 billion, and more than 100,000 creditors.
Customers left FTX earlier this week because of concern about a lack of capital, leading to an agreement to sell the company to larger rival Binance.
Kingston student Thomas, 22, who has been a customer of FTX for over a year, calls it a 'hub for crypto.'For the £2,000 he claimed to have on the exchange, which he calls a 'fairly large amount of money,' he claims he was able to submit a withdrawal request.
However, he is worried about the number of requests being made by FTX consumers and is unsure if all of them will be fulfilled as the business struggles.
The cryptocurrency community had hoped that Binance, the biggest cryptocurrency exchange in the world, could be able to save FTX and its depositors.
After reviewing FTX's financial records, Binance came to the conclusion that the issues facing the smaller exchange were insurmountable, and it withdrew from the agreement. A business that was once the pride of the cryptocurrency market had a dramatic fall in popularity.
In January, FTX collected $400 million from investors, valuing the business at $32 billion.
