The FTX collapse might impact “more than one million” investors
According to bankruptcy paperwork filed by the crypto exchange FTX, it presently has more than 100,000 creditors, but that figure might rise to over one million, according to The Financial Times. In addition, the corporation indicated that it has been in communication with “dozens of federal, state, and foreign regulatory bodies” during the previous several days.
Following the abrupt collapse of its exchange, FTX declared bankruptcy last week. The Bahamas Securities Commission said today that it has gained court clearance to hire two partners from the Bahamas and Hong Kong to oversee the unwinding of FTX Digital Markets, a critical component of FTX. The situation was described as “unique” in the petition, stating that “just a week ago, FTX, headed by its co-founder Sam Bankman-Fried, was recognised as one of the most renowned and creative organisations in the crypto market.”
According to the Financial Times, the Royal Bahamas Police announced Wednesday that they were investigating “to examine whether any criminal behaviour happened.” The day after declaring bankruptcy, the firm revealed that millions of dollars had vanished from cryptocurrency wallets due to “unauthorised transactions.” Prior to that, at least $1 billion in client cash had gone from FTX.
FTX’s problems began when the price of its native FTT token fell and many users withdrew their coin. Following reports that FTX was experiencing a liquidity problem, competitor Binance said that it will sell off around $500 million worth of FTT, thereby erasing the token’s value. Binance then announced its intention to acquire FTX, but pulled out a day later, citing problems discovered during due diligence. Bankman-Fried said that he intends to ultimately write an account of what happened to FTX.