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Sam Bankman-Fried out as FTX CEO as company files for bankruptcy

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Sam Bankman-Fried has resigned as CEO of FTX, the company announced Friday.

He has been replaced by John J. Ray III.

The company also says it has commenced "voluntary proceedings" under Chapter 11 of the U.S. bankruptcy code.

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In a press release, FTX said that FTX.com, Alameda Research, and 130 other affiliated companies would be commencing Chapter 11 proceedings.

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“Bankman-Fried has resigned his role as Chief Executive Officer and will remain to assist in an orderly transition,” FTX said. “Many employees of the FTX Group in various countries are expected to continue with the FTX Group and assist Mr. Ray and independent professionals in its operations during the Chapter 11 proceedings.”

Chapter 11 is a bankruptcy proceeding which reorganizes a debtor’s affairs, debts, and assets. It is also known as a “reorganization bankruptcy.”

Under Chapter 11, a business can continue its operations while it reorganizes.

In tweets on Friday, Bankman-Fried wrote "I'm really sorry, again, that we ended up here. Hopefully things can find a way to recover."

On Thursday, Bankman-Fried, who is a Semafor investor, announced his crypto trading fund Alameda Research would wind down trading. In a Twitter thread, he apologized to FTX clients and stressed that FTX U.S. was not impacted by the issues plaguing the company’s international arm.

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The crypto exchange is in the midst of a liquidity crisis. In his Thursday Twitter thread, Bankman-Fried said he had miscalculated the amount of liquid assets the exchange had available for customer withdrawals. “We saw roughly $5b of withdrawals on Sunday--the largest by a huge margin,” he wrote.

The Alameda Research website went dark Wednesday. In a red banner on FTX.com Friday, a notice advised that “FTX is currently unable to process withdrawals. We strongly advise against depositing. Deposits of TRX, BTT, JST, SUN, and HT are disabled.”

Semafor has previously reported that much of the crypto exchange’s legal and compliance teams have left the company, and that FTX sought a bailout of $1 billion before seeking a bailout from its competitor Binance.

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