FTX bankruptcy, according to the lawyer, is due to the lack of basic financial control. The company once amounted to $40 billion. However, it is important to understand FTX’s status first. Bankman-Fried’s team has spent about $300 million only on villas and real estate for senior executives and employees. FTX was a cryptocurrency exchange where you can purchase Bitcoin and other cryptocurrencies with existing currencies. Many customers used FTX digital wallets like bank accounts and expected the funds to be safe.
An explanation from Judge John T. City is about the FTX specific footsteps. the reason why rapid growth was possible, and why he traveled to various countries for seven years. Previously, FTX filed bankruptcy just eight days after the online leaking of weak financial information. Based on the court information, FTX was the world’s second-largest cryptocurrency exchange before bankruptcy.
As a result, Bankman-Fried resigned. FTX even sought bankruptcy protection to deal with the debt problem from court supervision. Attorney James Bromley mentioned it as the naked king. Then, he explained that the company encountered complex bankruptcies in the U.S. companies history. More than 1 million investors are keeping cryptocurrencies on the FTX exchange. Somehow, they may fail to collect funds.
According to FTX records, it has users in 27 countries. They mainly focus on the Cayman Islands, Virgin Islands, the United Kingdom, and China. After filing for bankruptcy, the amount of funds held by FTX was not known, but lawyers said the hacker appeared to have stolen at least some assets of FTX’s cryptocurrency. “We are currently under constant cyberattacks and are working to defend ourselves,” said Bromley.
Furthermore, the bankruptcy team revealed that FTX manages data for millions of customers. During the recess, some participants explained how they lost money in the FTX bankruptcy filing. One of the participants said they had lost their savings for life.
