FTX Stock Market Crash

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The collapse of the FTX stock market threatens the digital currency market

FTX Stock Market Crash

The collapse of the FTX platform for trading digital currencies, which declared bankruptcy a few days ago, as another platform for dealing in these currencies faces the specter of bankruptcy.

The Wall Street Journal

The Wall Street Journal, citing people familiar with the matter, said that cryptocurrency management, trading and lending platform BlockFi is currently planning to lay off some of its employees, as the troubled company prepares to face the specter of bankruptcy.

The paper reports that cryptocurrency lender BlockFi is filing for potential bankruptcy due to its heavy influence on bankrupt cryptocurrency exchange FTX.

BlockFi is a platform that enables cryptocurrency trading, allows you to get low-interest loans backed by cryptocurrency and earn rewards in bitcoins from purchases.

The BlockFi platform had denied reports that the majority of its assets were held in the FTX platform, but it returned and acknowledged the existence of deposits on the platform, which had recently declared bankruptcy, and had an UN drawn line of credit from FTX and obligations owed by FTX, according to the newspaper.

And the FTX platform went from being one of the largest cryptocurrency exchanges in one week to bankruptcy, which shook the entire digital asset market, and there are more than a million creditors claiming their dues, according to the newspaper.

Last week, BlockFi paused customer withdrawals in the wake of the FTX collapse that began with a Coin Desk report that raised questions about the balance sheet of Research, (FTX's sister company).

BlockFi said it has assets on the exchange as well as liabilities owed by FTX subsidiary Research, according to the Wall Street Journal.

BlockFi was among the few crypto platforms that agreed to bail out FTX as the market was shaken by the sharp drop in crypto-asset prices.

And BlockFi offered a $400 million revolving credit facility to FTX, which also included an option to acquire the company, the Wall Street Journal reported.

Meanwhile, a separate report from the Wall Street Journal revealed that Sam Bank man-Fred, co-founder of FTX platform, has been reaching out to potential investors in an effort to raise money to pay back FTX clients.

The 30-year-old, who stepped down as CEO the week before, spent the weekend with several employees reaching out for financial commitments that could offset some of the company's $8 billion shortfall.

FTX bankruptcy could affect more than 1 million investors

Bankruptcy documents filed by cryptocurrency exchange FTX indicate that it currently faces more than 100,000 creditors, but that number could expand to more than a million, the Financial Times reports. The company also stated that it has been in contact with US federal prosecutors, as well as "dozens of Federal and international government regulatory agencies" over the past few days.


 FTX declared bankruptcy last week after the sudden collapse of its market

 as the Bahamas Securities Commission said today that it had received court approval to appoint two partners from the Bahamas and Hong Kong to oversee the break-up of FTX Digital Markets, a major part of FTX, describing the situation as unprecedented. Noting that just over a week ago, FTX, led by co-founder Sam Bank man-Fried, was considered one of the most respected and innovative companies in the cryptocurrency industry.

The Royal Bahamas Police confirmed yesterday that it was working to “investigate any criminal misconduct,” according to the Financial Times. The day after declaring bankruptcy, the company reported that millions of dollars had gone missing from cryptocurrency wallets following unauthorized transactions. In addition, it had disappeared. At least $1 billion in customer funds from FTX before that.

FTX's troubles began after the price of the original FTT token fell and many users withdrew their cryptocurrency, after it was reported that FTX was facing a liquidity crunch, rival Binance said it would sell over $500 million of FTT, all of which wiped out the value of the token. Featured, Binance then said it would acquire FTX, but backed out of the deal a day later, citing concerns that arose during the due diligence process.