Home » Size, scope of FTX failure gets clearer as users fear worst

Size, scope of FTX failure gets clearer as users fear worst

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New York (AP) — days after cryptocurrencies The third largest exchange collapsed, The public is beginning to understand how embarrassing the FTX bankruptcy case is. Other cryptocurrency companies have failed as a result of the FTX unraveling, an event reminiscent of the domino-like meltdown of the 2008 financial crisis.

Users remained frustrated on Dark Tuesday as to when they would be able to get their money back, directing much of their anger towards the founder and CEO of FTX. Sam Bankman-Fried.

In court filings, FTX attorneys said: 100,000 claims against companies And when this case is completed, it is estimated that that number could exceed 1 million, most of whom are customers. The court has ordered FTX to provide at least a list of the company’s top 50 largest creditors by Nov. 18.

Lawyers said and confirmed that the company is in contact with the Department of Justice, the Securities and Exchange Commission, the Commodity Futures Trading Commission and dozens of other state, federal and international authorities. previous report The US government is investigating possible violations of US securities laws by Bankman-Fried and his lieutenants.

FTX filed for bankruptcy protection on Friday, sending a tsunami wave across the crypto industry. With its fair share of volatility and disruption this year, Including sharp drops in the price of Bitcoin and other digital assets. For some, the event is reminiscent of his Wall Street corporate failure during the 2008 financial crisis. Especially now that a company that was supposed to be healthy like FTX is failing.

The Wall Street Journal reports that BlockFi, which halted withdrawals over the weekend following the FTX bankruptcy, Currently actively considering personal bankruptcy And we are going to lay off our employees. In an earlier public comment, BlockFi management revealed that FTX’s failure put the company out of business. FTX provided financial backing to BlockFi this summer, including his $400 million line of credit backed by its own balance sheet.

BlockFi referred to FTX and Bankman-Fried hedge fund Alameda Research on Saturday, saying it was “shocked and disappointed by the news regarding FTX and Alameda.” As a result, we are unable to carry out our business as usual.”

Another cryptocurrency company, crypto lending firm SALT Blockchain, also appears to be on the brink of bankruptcy.turning point to the future drawn from the agreement Buy SALT because of your exposure to FTX. In a tweet, SALT’s CEO Sean Oren He said he was “fully committed to recovering from the damage done as a victim.”

Crypto Exchange Binance In Sign Of How Feared Investors Are That Cascading Effect Could Do Long-Term Damage proposed the creation of a relief fund It will save otherwise healthy crypto companies from failure. and effectively presented the potential of deposit insurance pools.

Meanwhile, FTX users lamented the loss in a Telegram chat group for traders who used the FTX exchange, writing that they lost access to amounts ranging from thousands to millions of dollars.

Some asked for information. Some speculate about the possibility of getting your money back, while others advise that you should accept that your investment is gone.

A moderator of one group posted intermittently, saying things like, “Please stop the death threats.” They wrote that they had no information on Bankman-Fried’s whereabouts or what would happen to his company.

“No news,” one moderator posted.

Many FTX users pointed to Bankman-Fried as responsible, punning his name to “Sam Bankrun-Fried” and calling for prosecution.

on tuesday, FTX US Support Account It was responding to posts from people asking about the funds on Twitter, telling them to message the Twitter account to get help.

Mohit Sorout, 30, said he lost access to 95% of the value of his cryptocurrency holdings when FTX shut down last week. Posting on Twitter“Pain is f (asterisk) (asterisk) (asterisk) real.”

An electrician based in New Delhi and Dubai, he started trading in 2017 and quit his job in 2018 to trade cryptocurrencies full time. With his business partners, he custom built his algorithm and grew the investment of thousands of dollars to many times that amount.

It is not clear what will happen to the funds of retail investors like Sorout who are trapped within the FTX ecosystem. he said on Monday.

Sorout said he never intended to keep all his investments on one platform, but the tools FTX has built for traders like him are very effective, and his algorithm works well there. It worked. He also trusted Bankman-Fried because of his high profile.

“The problem was the founder donating eight figures in the presidential campaign. He’s meeting with top bureaucrats, sponsoring chess tournaments and sponsoring stadiums,” Sorout said. “You really don’t think such a huge company, especially the CEO of that company, would cheat their customers, do you?”

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