FTX Employees Worldwide Learned of Bankruptcy Along With the Public

Staff from FTX Japan and other subsidiaries found out about the insolvency filing on Twitter, CoinDesk was told.

AccessTimeIconNov 11, 2022 at 6:24 p.m. UTC
Updated Nov 11, 2022 at 7:09 p.m. UTC
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Lavender Au is a CoinDesk reporter with a focus on regulation in Asia. She holds BTC, ETH, NEAR, KSM and SAITO.

Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.

Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

Sam Bankman-Fried’s embattled crypto exchange FTX filed for bankruptcy in the U.S. on Friday – but didn’t inform all of the 134 entities named in the filing about the move.

Some of them learned of the bankruptcy filing at the same time as the public, in some cases via Twitter, CoinDesk has been told.

FTX, which had a $32 billion valuation at the start of the year, has been collapsing steadily through the week, after a CoinDesk article questioning its sister company Alameda Research’s financials led to a run on the exchange.

The voluntary petition filed on Friday names FTX’s many local iterations scattered across the world, from the U.S. to Gibraltar and Japan along with its sister company Alameda Research, as “debtors” seeking protection from bankruptcy under Chapter 11 of the U.S. code.

But personnel at FTX Japan and other subsidiaries, who are listed among the debtors, learned about the filing at the same time as everyone else, they told CoinDesk.

“We found out on Twitter,” an employee at an FTX subsidiary outside of the U.S. told CoinDesk on the condition of anonymity, fearing retribution. The same person said that FTX’s staff in Turkey had put their salaries and bonuses into the company due to distrust of local banks and inflation of the lira. FTX Turkey has been allowing customers to withdraw some sums in Turkish lira intermittently since Thursday, according to its Twitter posts. “It’s a f**king disaster.”

This source added that staff had been pleading for clarity from Bankman-Fried, saying they had to answer clients and they were under scrutiny. “They are literally vomiting, it’s really bad,” this source said of people running FTX operations around the world, adding that “everyone put their whole work, life, reputation on the line for this guy,” referring to Sam Bankman-Fried.

Another entity named in the petition said the CEO had kept everyone in the dark, but they had seen the bankruptcy filing coming.

FTX US General Counsel Ryne Miller notified FTX employees worldwide about the bankruptcy in an internal memo posted on Slack just four minutes before the Twitter post announcing the same.

“Keep an eye on Sam’s Twitter. He posts news there more than internal updates,” said a person from FTX Japan, who also found out about the filing via Twitter.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

CoinDesk - Unknown

Lavender Au is a CoinDesk reporter with a focus on regulation in Asia. She holds BTC, ETH, NEAR, KSM and SAITO.

CoinDesk - Unknown

Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.


Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


CoinDesk - Unknown

Lavender Au is a CoinDesk reporter with a focus on regulation in Asia. She holds BTC, ETH, NEAR, KSM and SAITO.

CoinDesk - Unknown

Sandali Handagama is a CoinDesk reporter with a focus on crypto regulation and policy. She does not own any crypto.