Bankrupt crypto exchange FTX may have over 1 million creditors as ‘dozens’ of regulators probe collapse
By Matt Egan
Bankrupt crypto exchange FTX could have more than 1 million creditors and has been in contact with “dozens” of regulators around the world, according to court documents, underlining the far-reaching impact from the stunning collapse of one of the industry’s biggest players.
The new bankruptcy court filings also offer new details into the liquidity crisis that caused FTX to implode and called out the role of Sam Bankman-Fried, the exchange’s 30-year-old founder and one of the faces of the crypto industry.
In filings dated Monday, FTX’s lawyers say there is “substantial interest in these events” from regulatory authorities around the world.
In just the past 72 hours, FTX says its representatives have been in touch with “dozens” of federal, state and international regulatory agencies, including with the US Attorney’s Office, the US Securities and Exchange Commission and the Commodity Futures Trading Commission.
A person familiar with the matter confirmed to CNN on Monday that federal prosecutors in New York are investigating the FTX collapse.
FTX filed for bankruptcy last week and at the time estimated it had more than 100,000 creditors. Now, FTX has dramatically upped that estimate.
“In fact, there could be more than one million creditors in these Chapter 11 cases,” lawyers for FTX wrote.
The court filing also explained that the “emergency” bankruptcy filing came after FTX faced a “severe liquidity crisis.”
“Questions arose about Mr. Bankman-Fried’s leadership and the handling of FTX’s complex array of assets and businesses under his direction,” thefiling said.
Bankman-Fried resigned last week and apologized for his company’s collapse. The court filing said Bankman-Fried “ultimately agreed to step aside” at about 4:30 a.m. on Friday.
–CNN’s Kara Scannell contributed to this report.
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