One million investors could lose money from FTX crypto collapse
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More than a million investors are at risk of losing money due to the collapse of the FTX cryptocurrency exchange
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More than 1 million investors could lose money after FTX collapse.
Just over a week ago, the failed cryptocurrency exchange – founded by Sam Bankman-Fried – was valued at £27 billion.
But it quickly imploded after a spate of withdrawals it couldn’t keep up with.
Just over a week ago, failed cryptocurrency exchange FTX – founded by Sam Bankman-Fried (pictured) – was valued at £27 billion
In a court filing as part of the Chapter 11 bankruptcy, FTX attorneys said, “There are over 100,000 creditors in these Chapter 11 cases. There may even be more than 1 million creditors.’
The abnormally large number of creditors is a result of FTX’s sprawling and complex structure.
Consisting of a web of companies with over 130 registered entities, the company quickly grew to become the second largest digital coin exchange in the world.
Most of the creditors were clients of the 30-year-old Bankman-Fried’s companies. The filing also shows how seriously law enforcement agencies are taking the collapse.
Dozens of authorities are circling the company, including the US law firm, the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Bankman-Fried agreed to step down as CEO last week. Restructuring specialist John Ray, known for his work on Enron, has acquired the company.
The lawsuit added, “Barely over a week ago, FTX was considered one of the most respected and innovative companies in the crypto industry.”