In terms of 24-hour global crypto trade volume, FTX was the second-ranked cryptocurrency exchange. Due to concerns about low liquidity, this exchange has since folded.
Users of the FTX exchange panicked and started withdrawing their money after a minor dispute erupted with the Binance exchange over the sale of FTX tokens.
Later, the exchange discovered that it could not process withdrawal requests for all of its users since a sibling firm, Alameda Research, had already received a sizable quantity of user cash. In a US district court, FTX and the bulk of its companies filed for bankruptcy on October 8.
A few days ago, it was reported that the FTX exchange would liquidate its holdings of Bitcoin (BTC) and Ethereum (ETH) to settle its stakeholders, which might also have an effect on the price of BTC & ETH.
Such news also caused a great deal of worry among cryptocurrency traders, as seen by the abrupt decline in the price of two prominent crypto assets.
According to the majority of specialists close to the FTX exchange and its sibling companies’ bankruptcy case, it could take many years for creditors to receive money that they deposited on the exchange.
According to insolvency attorney Stephen Earl, partner at Co Cordis in Australia, the FTX bankruptcy case will undergo an “enormous exercise” in the liquidation process to regain the crypto assets and then figure out how to disburse the funds, with a potential time frame of years, if not “decades.”
Experts also noted that all cryptocurrency traders, investors, and fund depositors within the exchange ecosystem will be considered creditors.
The jurisdiction process will take some time because there are more than 50 million creditors waiting in line from different nations.
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