$32 billion cryptocurrency exchange FTX has filed for bankruptcy in the US, following weeks of speculation about the true financial health of the firm.
Sam Bankman-Fried has also stepped down as chief executive, the company said.
This massive turn of fortune for the once-second-largest crypto exchange further casts a shadow over the already troubled crypto market.
“I’m really sorry, again, that we ended up here. Hopefully things can find a way to recover,” Mr Bankman-Fried, nicknamed the ‘King of Crypto’, wrote on Twitter on Friday.
“I was shocked to see things unravel the way they did.”
Prior to the meltdown, Mr Bankman-Fried had been one of the stars of the crypto scene, drawing comparisons to investment magnate Warren Buffett, with a net worth estimated at more than $15bn (£12.8bn) as recently as Monday.
But rumours earlier this week that FTX and other firms owned by Mr Bankman-Fried were on shaky financial ground prompted a mass of customers to try to withdraw funds from FTX, an exchange used to buy and sell digital tokens.
Facing a cash crunch, Mr Bankman-Fried tried to organize a bailout but that failed, leaving FTX scrambling to raise billions of dollars and many customers unable to access their money.
By filing for Chapter 11 bankruptcy, the company can continue operating, while restructuring its debts under court supervision.
FTX said the goal was to “begin an orderly process to review and monetize assets for the benefit of all global stakeholders”.
“The FTX Group has valuable assets that can only be effectively administered in an organised, joint process,” said new chief executive John J Ray III, a lawyer who previously worked at a venture capital firm and has experience with high-profile bankruptcy cases.