Not at all conveniently, FTX had Binance as the main holder of funds held in the eponymous cryptocurrency, with its big rival “leaking” on social media the news that it would be unloading billions of dollars held in the cryptocurrency, citing extremely serious solvency issues. In utterly predictable fashion, Binance chief Changpeng Zhao’s “prophecy” came true of its own accord, opening up the possibility that Binance too could pose as a benefactor, proposing a full takeover of FTX, debt and all. Except, what do you know, the deal ran into the “curiosity” of the American authorities who came to investigate the questionable business practices undertaken by the company. Further, Binance’s proposed act of benevolence has run into too much controversy surrounding the exchange on the verge of bankruptcy, providing the ideal pretext for withdrawing from the offer presented rather “on the spur of the moment” to distract attention from the plan to take out a major rival.
The bankruptcy filing covers FTX Trading, FTX US, Alameda Research and about 130 other companies registered under the FTX Group umbrella. However, some entities such as FTX Australia and FTX Express Pay are not covered by the bankruptcy proceedings. In any case, under US law, the filing of bankruptcy does not automatically mean that the company will cease trading, as it can continue to operate to some extent while it seeks ways to repay creditors.
According to the release provided by the newly instituted CEO, John J. Ray III, “The FTX group has valuable assets that can only be managed in an organized, joint process. I want to [asigur] every employee, customer, lender, contracting party, shareholder, investor, government authority and other stakeholders that we will lead this effort with diligence, thoroughness and transparency.” Ray suggested that stakeholders should remain patient, noting that “events have moved quickly and the new team is only recently hired.”