FTX’s Bahamas unit files for bankruptcy in New York
FTX Digital Markets, the Bahamas-based unit of the recently collapsed cryptocurrency trading platform, has filed for bankruptcy protection in the United States.
The company filed in New York court on Tuesday under Chapter 15, which is a way for foreign companies to use US bankruptcy law to restructure debt – which is usually done because US law offers greater protection than those of other countries.
The move comes after the US arm of the crypto exchange, FTX Group, suddenly filed for bankruptcy Friday after facing a “serious liquidity crisis”. FTX founder Sam Bankman-Fried stepped down as CEO the same day.
The rapid collapse of FTX marked a staggering downfall for one of the largest and most powerful players in the crypto industry.
There could be more than 1 million creditors in previously filed U.S. cases, the FTX Group said Monday, adding that it had been in contact with “dozens” of U.S. and international regulators, including the U.S. Attorney’s Office, the States Securities and Exchange Commission States and the Commodity Futures Trading Commission.
Meanwhile, authorities in the Bahamas – where FTX is based – are investigating whether criminal misconduct occurred in connection with the company’s implosion, the Royal Bahamas Police said in a statement. statement Sunday.
FTX is one of many non-US based companies to use the protections of US bankruptcy law. Just this year, Scandinavian Airline SAS and the British company Cineworld Group, owner of the chain of cinemas Regal Cinemasfiled for bankruptcy in the United States.
– CNN’s Matt Egan and Allison Morrow contributed to this report.