Customers who trusted crypto giant FTX may be left with nothing
As the dust settles from one of the most shocking financial implosions in history, one of the key unknowns is how much customers who can’t access their money expect to get back from FTX, the crypto exchange that filed for bankruptcy last week.
The answer, according to legal experts, may be zero.
Before its unraveling, FTX.com marketed itself as a safe-for-beginners destination for buying and selling cryptocurrencies. But a liquidity crunch last week forced FTX to halt withdrawals, leaving customers and investors in limbo. FTX reportedly used customer funds to prop up its sister hedge fund’s high-risk trading operation without permission, according to the Wall Street Journal.
On Friday, FTX and the hedge fund, Alameda Research, filed for bankruptcy.
Federal prosecutors in New York are now investigating the exchange’s collapse, a person familiar with the matter told CNN. And authorities in the Bahamas, where FTX is based, launched a criminal probe into the firm over the weekend