The embattled FTX cryptocurrency exchange has filed for bankruptcy, according to a statement posted on its Twitter profile.
The company says that its Chapter 11 bankruptcy filing is a necessary step to "move forward" and "maximize recovery for stakeholders."
Notably, the Chapter 11 proceedings will also include the exchange's American subsidiary FTX.US. However, FTX Australia, LedgerX and some other subsidiaries will be excluded.
Sam Bankman-Fried will also step down as chief executive officer of FTX Group, but he will remain to "assist in an orderly transition." John J. Ray III has been appointed as his replacement. The Chicago lawyer is best known for collecting billions for the creditors of energy trading company Enron, which is known as one of the worst frauds in history.
The insanely rapid downfall of the cryptocurrency empire and its seemingly invincible founder has taken a heavy toll on the cryptocurrency market. Bitcoin, the largest cryptocurrency, crashed by more than 5% minutes after the bankruptcy announcement, reaching a new intraday low of $16,394 on the Bitstamp exchange. The cryptocurrency erased almost all of its Thursday gains that were mostly driven by a lower-than-expected consumer price index (CPI) print. For now, however, Bitcoin is comfortably above the two-year low of $15,632 that was recorded on Wednesday.
Some cryptocurrency-exposed stocks also fell sharply after FTX filed for bankruptcy, but the benchmark S&P 500 index remains in the green.