Cryptocurrencies
FTX’s Freefall Into Bankruptcy Shows Why Case File Is Empty
- Customers can expect disclosures in coming days, weeks
- Companies typically don’t go bankrupt on short notice
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The collapse of Sam Bankman-Fried’s crypto empire has been chaotic, fast and full of unknowns. The world should soon get some answers via a Delaware federal court.
FTX is what’s known in the industry as a “free fall” bankruptcy. More than 130 related companies sought court protection at the end of last week without filing any of the usual court motions or explanatory documents seen in a big US insolvency case. Two days later, the companies’ main court docket contains only a 23-page fill-in-the-blank petition. In nearly every other multi-billion dollar Chapter 11 case in recent years, lawyers quickly file a smattering of routine requests designed to stabilize operations.