Failed crypto exchange FTX could have more than a million creditors as ‘dozens’ of regulators scrutinize collapse


New York
CNN

Failed crypto exchange FTX may have more than a million creditors and has been in contact with “dozens” of regulators around the world, according to court documents, underscoring the huge impact of the shocking collapse of one of the industry’s biggest players.

The new bankruptcy court filings also provide new details about the liquidity crisis that caused FTX to implode and call out the role of Sam Bankman-Fried, the exchange’s 30-year-old founder and one of the faces of the crypto industry.

In Monday’s filings, FTX’s lawyers say there is “significant interest in these developments” from regulatory authorities around the world.

Over the past 72 hours, FTX says its representatives have contacted “dozens” of federal, state and international regulatory agencies, including 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 estimated at the time that it had more than 100,000 creditors. Now, FTX has raised that estimate dramatically.

“In fact, there could be more than a million creditors in these Chapter 11 cases,” FTX attorneys wrote.

The court file also explained that the “emergency” bankruptcy filing came after FTX had a “severe liquidity crisis.”

“Questions arose about Mr. Bankman-Fried’s leadership and management of FTX’s complex portfolio of assets and businesses under his direction,” Thefiling said.

Bankman-Fried resigned last week and apologized for the collapse of her company. Court filings said Bankman-Fried “finally agreed to step aside” at 4:30 a.m. Friday.

–CNN’s Kara Scannell contributed to this report.