FTX bankruptcy

HONG KONG/SINGAPORE : Further details on the bankruptcy of crypto exchange FTX emerged on Saturday, even as peers and partners distanced themselves from the ...

Its CEO Brian Armstrong told CNBC crypto markets need regulation to avoid more washouts like FTX. In its bankruptcy petition, FTX Trading said it has $10 billion to $50 billion in assets, $10 billion to $50 billion in liabilities, and more than 100,000 creditors. FTX raised $400 million from investors in January, valuing the company at $32 billion. In an illiquid bear market, the event will lead to a new round of cryptocurrency declines, as well as a liquidation of leverage." Bankman-Fried secretly transferred $10 billion of customer funds from FTX to Alameda, they said. The saga that has shaken the crypto world began with a rumour on Nov.

For a little while, it appeared some of FTX's American customers might escape the worst-case scenario confronting the beleaguered crypto platform.

Pederson bought TRX tokens shortly after the announcement, which were trading at an inflated price on FTX compared to other major crypto exchanges. But by Tuesday morning, a request to withdraw 2,000 euros worth of Bitcoin failed to go through and subsequent withdrawal requests have been stalled. Now, it is in limbo – and Thakur said he is basically writing it down to zero. FTX customers likely have a frustrating time ahead of them now that the exchange is in bankruptcy protection. He fears all his assets in FTX US, which include Bitcoin, Ether and Golden Warrior NFTs worth US$11,000, may be lost for good. However, many are resigning themselves to the fact that their holdings may be gone forever.

Once the white knight of crypto, Sam Bankman-Fried now needs someone to bail him out. Illustration by Gracelynn Wan for Forbes; Photos by Saul Loeb/Getty Images.

At that juncture, FTX thought it had enough [money](https://www.forbes.com/sites/mariagraciasantillanalinares/2022/09/27/ftx-pays-14-billion-to-get-voyagers-crypto-customers/?sh=15fe5c744168) to return most of the assets to Voyager owners in hopes of retaining some of them as clients. If it turns out that FTX used them for its own purposes, including possibly lending them to Alameda, that would lift the clients in the hierarchy of who is owed money during the bankruptcy. Despite Bankman-Fried owning a 7.6% stake in the brokerage after he invested around $650 million in May, Tenev insisted there was no direct or material exposure to FTX, adding that his brokerage has seen crypto inflows increase as a result of the turmoil. “FTX was sort of the white knight in Voyager,” says Gayda. With roughly $6 billion in cash at the end of the latest quarter, Robinhood likely won’t be hurt badly even if Bankman-Fried is forced to unload his stake as part of bankruptcy proceedings. If the FTX customers, who will be treated as unsecured creditors in bankruptcy, want to be proactive, they can do more than wait to be rescued. Over 63% of the assets are stablecoins, including tether and dai, which are meant to be fully collateralized with liquid assets and thus shielded from an event like the selloff that has wiped about 20% off of crypto values in the past week. “There’s really a crisis of confidence with respect to customers in the crypto industry,” says Gayda. Investors should “brace themselves for contagion from FTX’s bankruptcy,” Anto Paroian, CEO of crypto hedge fund ARK36, said in emailed comments. Valued at $32 billion in its latest funding round, FTX’s worth has crashed in the span of one week. The main option for FTX customers to recoup at least some of their holdings, says Robert Gayda, partner at Seward & Kissel corporate restructuring and bankruptcy group, is for a “Voyager-style sale” of any remaining crypto assets. Assets still under the company’s control would be put up for sale to the highest bidder.