The cryptocurrency company that helped make a young Berkshires native rich filed for bankruptcy protection Friday.
The company, FTX Group, filed for protection from its creditors after it became insolvent in what Reuters termed “one of the biggest meltdowns in the industry.” The company’s founder and chief executive, Sam Bankman-Fried, resigned and a new corporate leader was named.
The work status of Ryan Salame, the part-time Sandisfield resident who served as co-CEO of a related company, FTX Digital Markets, could not be determined Friday morning.
He did not respond to a request for comment from The Eagle.
On Twitter, he posted Sunday about changes facing the company, before the crisis that would engulf his corporate home accelerated.
“It’s so powerful learning who your friends are!” Salame said in a tweet. “Very excited to grow with them in the long term. It’s not hard to genuinely figure out who cares about customers and who doesn’t if you look past the insanity.”
FTX announced its bankruptcy on Twitter. Reuters reports that after a hoped-for acquisition by a rival company fell through, FTX was struggling to raise about $9.4 billion.
John J. Ray III was been named the new CEO of FTX Group.
The company’s statement said that some FTX employees would continue with the transition. “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.”
The collapse came swiftly, various business publications reported, for a company that was “hailed as a trusted platform just a week ago,” the Wall Street Journal reported.
The company statement said that FTX Digital Markets Ltd. was one of the subsidiaries not included in the bankruptcy filing. The company said it had about 130 “additional affiliated companies.” It was not clear whether FTX Digital Markets Ltd. was the same entity as FTX Digital Markets, for which Salame served as co-CEO.
The Wall Street Journal reported that the assets of FTX Digital Markets Ltd., based in the Bahamas, had been frozen by that country’s Securities Commission. A provisional liquidator had been named, the Journal said.
Further, the newspaper reported that directors of FDX Digital Markets have lost their powers. No assets can be transferred, the Securities Commission said, without an OK from the provisional liquidator.
The Journal reported: “The commission said that it is aware of statements suggesting that clients’ assets were mishandled, mismanaged or transferred to Alameda Research, a trading firm also run by Mr. Bankman-Fried. Any such actions would be ‘contrary to normal governance, without client consent, and potentially unlawful,’ the commission said in a statement.”