The Questionable Virtues of Chapter 11 in the FTX Bankruptcy

On November 14, 2022, FTX, the third largest crypto exchange in the world, filed for bankruptcy. Since then, the company, its many affiliates, and its 30-year-old owner and founder, Sam Bankman-Fried, have been investigated by lawmakers and regulators across many jurisdictions, including the Commodity Futures Trading Commission, the Securities and Exchange Commission, and the U.S. Attorney for the Southern District of New York. Early reports indicate that the company faces aggregate claims from creditors in the billions of dollars and has traditional, liquid assets that fall far short of meeting these liabilities.

The bankruptcy declaration reveals the … Read more