Currently in the Bahamas, Sam Bankman-Fried is due back in the US in December to attend a hearing to be held by the House of Representatives Financial Services Committee to explain the collapse of his exchange, FTX. According to FTX’s bankruptcy filing, read by the livecoins, its collapse left more than 100,000 creditors. However, another paragraph of the document mentions that this number could easily reach 1 million injured people.
“As established in the Debtors’ filings, there are over one hundred thousand creditors in these Chapter 11 cases. In fact, there may be over a million creditors in these Chapter 11 cases.”
In addition to lost money, another point that worries FTX users is their privacy. After all, Celsius, another cryptocurrency company, exposed all of its creditors last month after declaring bankruptcy, and that could happen again.
FTX collapse worries officials
Some portals like DailyMail are pointing out that even the FBI is planning to extradite Sam Bankman-Fried to the US. After all, his empire had more than 134 companies, some under American laws, like FTX.US. In any case, Bloomberg sources say that the founder of FTX would be cooperating with the authorities of the Bahamas, the host country of the global FTX and home of the former billionaire, and that they would be in conversations with US authorities. That being said, the US Financial Services Board expects to hear from Bankman-Fried later this month, regardless of how his trip goes.
“The FTX crash caused tremendous damage to over a million users, many of whom were ordinary people who invested their hard-earned savings into cryptocurrency exchange FTX, only to have it all disappear in a matter of seconds”, said Maxine Waters of the Financial Services Committee. Binance and other FTX-related companies such as Alameda Research are also expected to be in attendance at the occasion. Finally, Waters also commented on the need for regulation that does not allow such cryptocurrency services to “operate in the shadows outside of robust federal oversight and clear rules of the road.”
FTX’s domino effect is starting to be felt in the market
Due to the lack of confidence brought on by the collapse of one of the world’s largest brokerages, investors are rushing to withdraw their funds from other services. As a result, others have also proven themselves insolvent while trying to hide it from their customers. Furthermore, several exchanges also had exposure to FTX, also losing their funds which actually belonged to their users. Therefore, the current market situation looks like a labyrinth, with several paths crossing and only one way out. Another consequence of mass looting can also be observed in the networks themselves. Bitcoin transaction fees showed a huge increase this week and are already at R$ 3.70. The same happens in Ethereum, with even higher values. Either way, this is helping ETH holders as the network is burning more coins than printing, which could be good news. Therefore, even though the moment is uncertain about the industry, cryptocurrencies continue to do their job. That is, processing transactions and serving as a shelter for those who do not trust third parties, whether entrepreneurs or politicians.
