How Would It Feel to Owe Money to At Least a Million People
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| IMAGE: LAM YIK/BLOOMBERG VIA GETTY IMAGES |
According to Tuesday's court filing, the embattled and bankrupt cryptocurrency exchange FTX may owe more than a million people money.
FTX, which has imploded spectacularly over the last week, has gone from being the world’s second-largest cryptocurrency exchange to one of the biggest crypto disasters ever, with CEO Sam Bankman-Fried’s net worth going from more than $15 billion to essentially nothing over the course of just a few days.
“The events that have befallen FTX over the past week are unprecedented. Barely more than a week ago, FTX, led by its co-founder Sam Bankman-Fried, was regarded as one of the most respected and innovative companies in the crypto industry,” the filing notes. “FTX faced a severe liquidity crisis that necessitated the filing of these [bankruptcy] cases on an emergency basis last Friday. Questions arose about Mr. Bankman-Fried’s leadership and the handling of FTX’s complex array of assets and businesses under his direction.”
The filing states that, initially, it was thought that there were “over one hundred thousand creditors in these Chapter 11 Cases.” It then states that “in fact, there could be more than one million creditors,” meaning that FTX could owe money to more than a million people, the vast majority of whom are customers and former customers.
The filing is an attempt to consolidate and simplify the bankruptcy process; as noted in an earlier filing, FTX operated a highly complex corporate structure with dozens of companies, each of which filed for bankruptcy separately last week.
The fate of customers' money is still up-in-the-air as FTX halted withdrawals last week.
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