FTX Doom attracts dozens of federal, state and international agencies

FTX Doom attracts dozens of federal, state and international agencies

Supervisory authorities around the world are in contact with FTX lawyers who said that between 100,000 and more than one million users could be affected by the shock insolvency of the stock exchange.

The flagship of the company, ftx trading LTD, a lawsuit submitted a "nofollow noopener" target = "_ blank" href = "https://paCer-documents.S3.amazonaws.com/33/0421206444082.pdf"> movement US bankruptcy court in Delaware on Monday to receive permission to contact its creditors by email.

The law firm Sullivan & Cromwell also applied for facilitations when submitting a list of 20 most important creditors for each of the 134 companies associated with FTX that had applied for bankruptcy according to Chapter 11 last Friday.

Instead, the application calls on the court to allow it to submit only one, consolidated list with the 50 most important creditors of all FTX companies by Friday.

"... The debtor [ftx] await you that the creation of separate creditor lists for each individual debtor would take an excessive part of the limited time and resources of the debtors in this critical period," said lawyers.

The submission marks one of the first steps in a spacious and pioneering insolvency proceedings for the crypto industry.

"As shown in the applications of the debtors, they are over [100,000] creditors in these cases according to Chapter 11. In fact, there could be more than a million creditors in these cases," wrote lawyers.

ftx, led by founder Sam Bankman-Fried, was one of the largest crypto stock exchange brands in the world at the time of his collapse and handled a daily trading volume in billions of bills, which was only exceeded by Binance.

But Bankman-Fried's FTX, which was once estimated at more than $ 32 billion, suddenly collapsed last week. His sister trading company Alameda Research, once supposedly a completely independent company, apparently worked with a precarious balance that was strongly aligned with the locals for the stock exchange.

Binance CEO Changpeng Zhao, who had previously prompted his crypto exchange to invest in FTX, announced that he would soon submit his FTT share to avoid excessive engagement. The markets reacted negatively, sent the FTT down by almost 90 % and triggered a 6 billion dollar bank run on FTX.

ftx users had hurried to lift their funds from the platform based on the Bahamas, which led to a suspension of the withdrawals. At about the same time, Zhao and Bankman-Fried launched a possible Buyout deal to save FTX customers, which would have caused Binance to absorb ftx.

The deal finally failed what led to the bankruptcy of FTX and countless customers on his own pocket, including hedge funds and crypto projects.

Later, details of epic mismanagement at FTX appeared, most clearly the use of customer money to complete risky bets in the crypto ecosystem, which led to a black hole of more than $ 8 billion. It is a chaos that now has to be cleaned up by the restructuring expert John Jay Ray III who treated the unknown group giant Enron according to its own bankruptcy.

"Immediately after making an appointment [Ray], FTX began working with the external legal, turnaround, cyber security and forensic investigators in order to secure the wealth of customers and debtors around the world," wrote lawyers.

ray and his team stopped the commercial and withdrawal functions to FTX and arranged to move the company's digital assets to a new Cold Wallet store, an answer to A Hacken with almost half a billion dollars on the weekend.

The Bahama authorities have already announced a Investigation its local assets. The latest bankruptcy application from FTX cited "considerable interest in these events among the supervisory authorities around the world".

FTX representatives "in the last 72 hours in contact with the US public prosecutor, the US stock exchange supervisory authority, the Commodity Futures Trading Commission and dozens of federal, state and international supervisory authorities," says file.

If this disclosure is something, all this ordeal is just starting.

h/t: Kadhim Schubber

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The Post FTX Doom attracts dozens of federal, state and international agencies and is not financial advice.