FTX expects to have more than 1 million individual creditors, the company has said in its first bankruptcy filing, scattered across more than 100 companies in the wider group.
The Guardian reported today (15 November) that according to the filing at the bankruptcy court in the US state of Delaware, where FTX US is based, Sam Bankman-Fried, the founder and chief executive, stepped down at 4.30am on Friday, "after consultation with his own legal counsel".
"FTX faced a severe liquidity crisis that necessitated the filing of these cases on an emergency basis last Friday," the documents say. "Questions arose about Mr Bankman-Fried's leadership and the handling of FTX's complex array of assets and businesses under his direction."
The new leadership of the company has been in contact with a large number of law enforcement organisations, the filing confirms, including "the US Attorney's Office, the US Securities and Exchange Commission, the Commodity Futures Trading Commission, and dozens of federal, state and international regulatory agencies".
"There are over 100,000 creditors in these Chapter 11 cases. In fact, there could be more than one million creditors in these Chapter 11 cases," the lawyers say. "The debtors anticipate overlap among the various debtors' creditor lists, and certain debtors may have fewer than 20 significant unsecured creditors."
Regulators around the world have reacted to the unfolding news including the Cyprus Securities and Exchange Commission announcement on 11 November that the authorisation of the Cyprus Investment Firm FTX (EU) Ltd was suspended over "suspicions of alleged violations".
Just two months previously, in mid-September FTX secured a licence to operate in the EU, from Cyprus, and its founder had said: "Securing this license in the European Union is an important step in achieving our goal of becoming one of the most regulated exchanges in the world.
"We are continuing to work with [Cypriot regulators] and regulators across the globe to be the leader in the digital asset industry when it comes to meeting the financial standards that are expected of traditional financial institutions."
The Securities Commission of the Bahamas also took action, by freezing the assets of FTX Digital Markets and related parties, calling it a "prudent course of action" to "preserve assets and stabilize the company".