More than one million investors at risk of losing money from collapse of FTX cryptocurrency exchange
More than 1m investors could lose money after FTX collapsed.
Just over a week ago, the failed cryptocurrency exchange – founded by Sam Bankman-Fried – was valued at £27billion.
But it quickly imploded after experiencing a surge in withdrawals it was unable to fulfil.
Just over a week ago, failed cryptocurrency exchange FTX – founded by Sam Bankman-Fried (pictured) – was valued at £27bn
In a court filing as part of its Chapter 11 bankruptcy, lawyers for FTX said: ‘There are over 100,000 creditors in these Chapter 11 cases. In fact, there could be more than 1m creditors.’
The abnormally large amount of creditors is a result of FTX’s sprawling and complex structure.
The company was made up of a web of companies with more than 130 registered entities and grew quickly to become the world’s second largest digital coin exchange.
Most of the creditors were clients of 30-year-old Bankman-Fried’s companies. The filing also reveals just how seriously law enforcement agencies are taking the collapse.
Dozens of authorities are circling the company – including the US Attorney’s Office, the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Bankman-Fried agreed to step down as chief executive last week. Restructuring specialist John Ray, known for his work on Enron, has taken over the company.
The court filing added: ‘Barely more than a week ago, FTX was regarded as one of the most respected and innovative companies in the crypto industry.’