FTX companies file for Chapter 11 bankruptcy

FTX Trading and more than one hundred affiliated companies filed for Chapter 11 bankruptcy protection in Delaware on 11 November 2022. Sam Bankman-Fried resigned as chief executive, and restructuring specialist John J. Ray III took over after a rapid crisis left customers unable to withdraw funds.

The collapse followed reporting about the relationship between FTX and Alameda Research, a rival exchange's decision to sell an FTX-linked token and a surge of withdrawal requests. A proposed acquisition by Binance was abandoned after due diligence. Liquidity failure exposed deeper questions about customer assets, governance and accounting.

Bankruptcy filings establish insolvency proceedings, not criminal guilt. Prosecutors later charged and courts convicted individuals through separate processes with their own evidentiary standards. This article does not treat every employee, investor or customer as participating in misconduct by association.

The new chief executive described severe failures of corporate controls. Asset and liability totals changed as administrators located wallets, records and claims across jurisdictions. Early balance-sheet figures were therefore provisional and should not be presented as a final recovery estimate.

This event is the entry into court-supervised restructuring and leadership change. Token prices, contagion at other firms and later distributions are consequences requiring separate measurement. The bounded record helps distinguish a dramatic market narrative from the precise legal act that froze claims and created an organized process for creditors.