On November 11, 2022, former FTX CEO Sam Bankman-Fried resigned, handing over control to John Ray, who immediately filed for Chapter 11 bankruptcy in the U.S. This marked the beginning of the end for one of the most influential crypto exchanges.
The Beginning of the End for FTX
Following Bankman-Fried's resignation, U.S. authorities charged him and four of his associates with fraud. FTX users and creditors were left without access to billions, unsure of repayment possibilities. John Ray described the firm's management as 'an utter failure of corporate controls at every level.'
Legal Consequences for Leadership
The former FTX CEO was convicted on seven felony counts and sentenced to 25 years in prison, with the legal team filing an appeal. Other executives faced various sentences for their roles in misusing customer funds, with Nishad Singh serving time served.
Efforts for Recovery and Compensation
In bankruptcy court, a federal judge approved a reorganization plan that allows the repayment of 98% of users' funds, not considering BTC and token price gains. FTX is actively pursuing funds through lawsuits and settlement deals.
Two years after FTX filed for bankruptcy, the crypto market continues to feel the impact of events associated with the exchange. The FTX case has become an important lesson for market participants and regulators worldwide.
