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FTX starts strategic review and seeks relief to pay suppliers

Failed cryptocurrency exchange FTX announced on Saturday (19) that it has launched a strategic review of its global assets and is preparing for the sale or reorganization of some businesses. FTX, along with approximately 101 affiliated firms, has also sought legal assistance to allow the operation of a new global cash management and payment system for its critical suppliers.

The exchange and its affiliates filed for bankruptcy in Delaware on 11 November in one of the most high-profile crypto booms, leaving an estimated 1 million customers and other investors facing total house losses. of billions of dollars.

The brokerage will explore sales, recapitalizations or other strategic transactions for some of its units, as the new CEO of the company, John Ray, said in a statement. In a court filing, FTX sought permission to pay pre-petition claims of up to $9.3 million to its critical suppliers following an interim order and up to $,5 million after the final order entry. The exchange said that if it does not receive the requested legal protection, it will result in “immediate and irreparable damage” to its business.

FTX, one of the largest cryptocurrency brokerages in the world, has come to around US$ 32 billion this year. The company’s growth took its owner, the young Sam Bankman-Fried, to the position of one of the biggest billionaires in the world, a status that he quickly lost.

In the first half of the year, with the increase of interest rates in the world (which negatively impacts risk assets, such as cryptocurrencies), the owner of FTX started to intervene to save other companies, lending money.

One of the companies that received money from FTX was Alameda Research – belonging to Bankman-Fried himself, who received billions in FTT (the FTX token, a kind of official currency of the platform). Experts point out that, even though the businesses should have been separated, the executive used the resources of the clients that were deposited in the brokerage to save the Alameda operation.

When this illegal transaction came to light, the brokerage customers started a race to withdraw funds, afraid of losing their deposits. Not having enough dollars to pay for all the withdrawals, FTX went bankrupt.

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