Crypto firm FTX files for bankruptcy, CEO exits

STORY: Embattled cryptocurrency exchange FTX has filed for bankruptcy and its CEO Sam Bankman-Fried will step down, marking a stunning reversal of fortune for the 30-year-old crypto executive who was once worth nearly $17 billion.

In a statement posted on Twitter Friday, FTX said it has begun voluntary Chapter 11 bankruptcy proceedings in Delaware.

It comes after a week-long saga that began with a run on FTX and an abandoned takeover deal by crypto rival Binance, triggering what could be one of the biggest meltdowns in the industry.

The liquidity crisis at FTX prompted intervention from regulators around the world as the exchange tried to stave off collapse, dragging down an already struggling bitcoin and other digital tokens.

Sources told Reuters that FTX was scrambling to raise about $9.4 billion from investors and rivals, as the exchange sought to save itself from a flurry of customer withdrawals.

Bankman-Fried, who founded FTX, until recently was hailed as a "white knight" of the crypto world and drew comparisons to billionaire Warren Buffett.

Some of the biggest names in sports, entertainment and finance invested in FTX, including Tom Brady and now ex-wife Gisele Bundchen, Kevin O'Leary of Shark Tank fame, Larry Fink's BlackRock, Dan Loeb's Third Point and Brad Gerstner's Altimeter Capital.

According to the Wall Street Journal, FTX brand ambassadors included basketball's Steph Curry and Shaquille O’Neal, baseball's David Ortiz and tennis star Naomi Osaka.