The cryptocurrency exchange FTX announced today that they have filed for bankruptcy in the United States. This cryptocurrency exchange has been at the center of attention for the past week. The founder and former CEO of the exchange, Sam Bankman-Fried, announced that he will follow the company until the end of this process. Moreover, he publicly confessed his support for John J. Ray III, the new CEO of FTX.
As stated in their press release, the FTX Group, Alameda Research, and around 130 affiliated companies, have filed for bankruptcy. For your information, the FTX Group includes both FTX.com and FTX US. This filing for chapter 11 bankruptcy proceedings comes after many attempts to revive FTX and Alameda Research. After asking for help from CZ Binance and Justin Sun, Bankman-Fried saw no hope of reviving the companies.
The past week was a rollercoaster for the cryptocurrency market, with lots of scandals unfolding each day. This took a toll on the market as prices began dropping rapidly. Cryptocurrencies that were directly involved in these events lost as much as 60% of their value in just a few days. Even Bitcoin and Ethereum, two of the biggest cryptocurrencies in the market, experienced a huge price drop during this past week.
While CZ Binance and Justin Sun are tirelessly working towards minimizing market damages, they cannot stop what is to come. Just some days ago, there were speculations that Binance might acquire FTX soon. However, CZ Binance announced that he will be backing out from the deal because of the recent market crash.
Will Justin Sun Purchase FTX?
Justin Sun, the founder of Tron, announced that he is ready to give billions to save FTX. After this announcement, allegations that Sun is working towards acquiring FTX as a whole were born. Well, until now, nothing is certain, but as we now know that Bankman-Fried has filed for bankruptcy, Sun acquiring FTX is highly unlikely. Nevertheless, Sun was able to broker an agreement with FTX, where the exchange will allow its users to trade and withdraw tokens belonging to the Tron blockchain.
Will the Bankruptcy of FTX Affect Bitcoin?
Yes. The bankruptcy of FTX will affect the whole market. Until today, anything that happened to major crypto projects and companies has had an effect on the market. The Terra Luna crash, for example, was one of the events that initiated a market crash earlier this year, in May.
Immediately after the news of FTX’s bankruptcy got out, Bitcoin’s price decreased from $17,500 to $16,500, falling over $1,000 in just minutes. We are not sure what to expect, but until now, the market performance has always reflected such events. Thus, we believe that you should be more cautious than ever when it comes to trading and investing.