According to the latest reports from the cryptocurrency world, FTX crypto exchange which filed for bankruptcy a few days ago could have more than 1 million creditors. FTX which was founded by Sam Bankman-Fried in 2017 was considered one of the largest crypto companies in the world when it came under a huge liquidity crunch.
The latest regulatory filings made by FTX with authorities suggest that the company has appointed five independent directors to the board of each major company under the FTX group. This will include Alameda Research, another tech company co-founded by Sam Bankman-Fried.
The regulatory authorities have also opened detailed investigations into the books and transactions of FTX to find whether any scam / fraudulent act was behind the sudden collapse of the crypto giant. As the company filed for Chapter 11 bankruptcy proceedings in the United States, various analysts and news agencies had reported incidents of huge misappropriation of funds from FTX as unknown transactions.
Various news agencies also reported that newly appointed CEO, John Ray confirmed there was unauthorized access to funds of FTX. Many believe this may have happened through any loopholes created by Malware or viruses which got into the systems and app of FTX.
The Sister company of FTX, Alameda Research is also under strict investigation as the company has received customer funds from FTX for various business purposes.
Sudden withdrawal of funds by consumers and growing concerns regarding the safety of crypto assets are what are said to be major reasons for the downfall of FTX. Panicked traders withdrew $6 billion from the platform in just 72 hours pushing the company to a liquidity crisis.
Various attempts by Sam Bankman-Fried to find more money from interested investors also failed as no one was visibly ready to pump millions of dollars into a sinking ship.
The rival company of FTX, Binance had shown interest in buying the platform. Binance’s CEO even announced the offer. Later news agencies reported that Binance pulled out from the acquisition offer. There were reports that Binance decided to revert on the deal after check-in the loan book of FTX which indicated large amounts of debts to various creditors.
Many are also questioning the leadership quality of Sam Bankman-Fried in running FTX. Sam himself had earlier admitted that he tried to expand the empire of FTX within a small time without looking at the issues which were being faced by the crypto exchange.
