FTX Creditors Number Around One Million

Crypto exchange, FTX filed for bankruptcy in the US citing a “severe liquidity crisis”. FTX is said to have more than one million creditors.

The FTX filing of bankruptcy stated that the crypto exchange was in contact with several global regulators and had appointed five new independent directors at its main companies, including Alameda Research.

Known as one of the world’s biggest crypto exchanges filed for bankruptcy after traders pulled $6 billion from the exchange within three days and Binance dropped its plans to help FTX.

“FTX faced a severe liquidity crisis that necessitated the filing of these cases on an emergency basis last Friday,” stated in the court filing.

The case of FTX’s bankruptcy included more than 100,000 creditors and this figure could go past one million according to the filings. It was also disclosed that FTX requested for several FTX group companies file a consolidated list containing the major creditors instead of separate ones.

Documents also note that FTX countered a cyber attack last November 11, after reporting that it had seen “unauthorized transactions” on their platform.

FTX is currently in contact with the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), the U.S. Attorney’s Office, and several other international states, and federal agencies.

The issue currently only involves crypto traders and exchanges but is now being discussed in mainstream policy discussions.

Federal Reserve’s Wall Street cop, Michael Barr mentioned his apprehensions about risks emanating from the nonbank sector over which regulators like the US Central Bank have limited scope.

“That includes obviously crypto activity, but more broadly risks in parts of the financial system where we don’t have good visibility, we don’t have good transparency, we don’t have good data. That can create risks that blow back to the financial system that we do regulate,”  he states.

Source: Inquirer