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Why Millions Of Investors Are At Risk Of Losing Money In FTX Cryptocurrency Exchange?
After FTX’s demise, more than 1 million investors might lose money.
The Sam Bankman-Fried-founded cryptocurrency exchange was valued at £27 billion just over a week ago.
But after experiencing a spike in withdrawals that it couldn’t handle, it quickly imploded.
Sam Bankman-Fried launched the bankrupt cryptocurrency exchange FTX, which was valued at £27 billion just over a week ago.
Lawyers for FTX stated in a court document as part of its Chapter 11 bankruptcy: “There are over 100,000 creditors in these Chapter 11 proceedings. In actuality, there can be more than a million creditors.
The extensive and intricate structure of FTX is the cause of the unusually high number of creditors.
The business, which was composed of a web of organizations with more than 130 registered firms, expanded swiftly to rank second in the world among digital coin exchanges.
Clients of the businesses owned by Bankman-Fried, 30, made up the majority of the creditors. Additionally, the filing shows how seriously law enforcement is treating 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.’
