FTX, Collapsed Crypto Exchange, Could Owe More Than 1 Million Creditors

The collapsed crypto exchange FTX and its related businesses could owe money to more than one million people and organizations, according to documents filed in bankruptcy court on Monday, illustrating the scope of a corporate meltdown that has drained traders’ accounts and plunged the crypto industry into crisis.

In FTX’s first substantive court filing since it filed for bankruptcy on Friday, the company’s lawyers offered few details about the state of the business. But they said FTX was in touch with “dozens” of federal, state and international regulators and law enforcement officials, including the Securities and Exchange Commission, the Justice Department and the Commodity Futures Trading Commission.

Those investigations began last week after a run on deposits left FTX with an $8 billion shortfall. In a stunning corporate drama, a company once regarded as among the safest and most reliable corners of the freewheeling crypto industry collapsed practically overnight.

The firm’s founder and chief executive, Sam Bankman-Fried, announced his resignation when the bankruptcy papers were filed on Friday in federal bankruptcy court in Delaware. Mr. Bankman-Fried had agreed to step aside at around 4:30 a.m. that day, the new filing said, after consulting with his own legal team.

He handed control to John J. Ray III, a veteran of corporate crises. Since then, Mr. Ray and other FTX officials have worked “around the clock” to get the company in order, according to the bankruptcy filing. The firm halted trading and responded to a “cyberattack” reported late on Friday night, the filing said.

This is a developing story. Check back for updates.