The massive impact of the struggling cryptocurrency exchange FTX’s bankruptcy on traders is suggested by the possibility that it has more than a million debtors.
According to the counsel for the company, in such situations, debtors are often obliged to furnish a list of the names and addresses of the top 20 unsecured creditors. The group instead plans to file a list of the 50 major creditors by Friday at the latest due to the size of its debts.
Each of FTX’s significant parent companies has appointed five new independent directors. FTX has spoken with “dozens” of regulators both domestically and abroad over the past 72 hours.
As “unsecured creditors” in past bankruptcy proceedings, merchants on these platforms will probably be at the back of the line of parties vying for payment, from suppliers to workers.
The website had over a million members at its height and was valued by investors at $32 billion. Investors sold their holdings and removed money from the exchanges as a result of the company’s insolvency, which had a chilling impact on the sector.
The CEOs of Binance and Crypto.com tried to reassure investors about the stability of their businesses on Monday. While the CEO of Crypto.com, Kris Marszalek, claimed that his company had an “extremely strong balance sheet,” Binance’s Changpeng Zhao claimed that his exchange had only seen a slight increase in withdrawals.