- In an updated filing on Tuesday, FTX's lawyers said the crypto exchange might have more than one million creditors.
- FTX is working with dozens of federal, state, and international regulators.
- Authorities are demanding better crypto regulatory frameworks amid the crisis.
Assets Being Reorganized
According to the filing on Tuesday, FTX’s legal team, Alvarez & Marsal, is in contact with dozens of state, federal, and international regulators, including the Securities and Exchange Commission, the Justice Department, and the Commodity Futures Trading Commission. As part of the company's bankruptcy processes, FTX's new CEO, John J. Ray III, is working with legal, cybersecurity, and forensic advisors.
Learning From The Meltdown
After FTX's collapse, the popular adage, "Not your keys, not your crypto," is gaining traction on Twitter. It means that crypto investors can only be sure of their holdings if they store them in a wallet they control.
Investors' wallets and keys were held by FTX, which means access to funds depended on the exchange's ability to send money. Now that FTX has collapsed, investors have lost access to their funds. This is why cold wallets, where cryptocurrency tokens are stored offline, are recommended for storing cryptocurrencies.
Additionally, regulators worldwide are stressing the need to have a regulatory framework for cryptocurrency. Recently, U.S. Treasury Secretary Janet Yellen said the collapse of Sam Bankman-Fried's FTX crypto empire reinforced her belief that digital assets require "very careful regulation."
The Bottom Line
FTX's downfall has shocked many in the crypto world and led to calls for increased regulation. Over the past week, FTT, the native token of FTX, has dropped by 94%, trading at $1.95, while Bitcoin has fallen by 11%, hovering around $16,000.