FTX’s bankruptcy may involve more than a million creditors

FTX is speaking with the US Attorney’s Office and “dozens” of US and international regulatory agencies. PHOTO: AFP

NEW YORK – FTX named a slate of new independent directors to oversee the collapsed crypto empire and said its bankruptcy may involve more than a million creditors.

The company is speaking with the US Attorney’s Office and “dozens” of US and international regulatory agencies, according to new bankruptcy court papers.

“Questions arose about Mr Bankman-Fried’s leadership and the handling of FTX’s complex array of assets and businesses under his direction,” lawyers for the crypto company wrote. FTX plunged into bankruptcy court after facing “a severe liquidity crisis that necessitated the filing of these cases on an emergency basis”.

Former FTX chief Sam Bankman-Fried in a series of cryptic tweets over the last 24 hours spelled out the words “What HAPPENED.” He finished with the message: “NOT LEGAL ADVICE. NOT FINANCIAL ADVICE. THIS IS ALL AS I REMEMBER IT, BUT MY MEMORY MIGHT BE FAULTY IN PARTS.”

The bizarre sequence sparked hot debate – and not a little anger – on Twitter as users tried to second guess what would come next.

Mr Anthony Scaramucci, whose SkyBridge Capital was caught up in the implosion of FTX.com, said he did a thorough background check on its founder Sam Bankman-Fried, but it wasn’t enough to protect himself from “misrepresentations”.

“I was doing a lot of due diligence on him, but clearly not enough,” Mr Scaramucci said at the Bloomberg New Economy Forum on Tuesday. He added that FTX’s stake in SkyBridge can’t be transferred to anybody “without my permission”.

Digital-asset exchange Binance said it will submit evidence to UK lawmakers regarding discussions held about FTX.com when the two were in deal talks, as well as on its decision-making around the sale of FTX.com’s native token FTT.

Mr Daniel Trinder, Binance’s vice president of government affairs in Europe, said the company would provide the information to members of the UK Parliament’s Treasury Committee as part of the crypto exchange’s appearance as a witness in a crypto asset inquiry. 

The committee’s chair Harriett Baldwin said that the group expects to receive evidence including internal correspondence and records about potential market consequences of Binance’s announced divestment of FTT, and about the due diligence carried out regarding the potential acquisition of FTX.

Mr Trinder was grilled by lawmakers on Monday over the firm’s decision to announce a planned sale of more than US$500 million (S$684 million) in FTT on Nov 6 – a move that caused trading volumes for the token to spike to their highest in more than a year. It was also part of the chain of events that led to FTX eventually filing for bankruptcy. BLOOMBERG

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