- According to the court filing document on Monday, FTX creditors may be more than 1 million creditors.

- More entities continue to disclose their exposure and hostaged fund related to FTX turmoil.

- According to McGlone, since the leading cryptocurrency, Bitcoin, has broken down, we should expect a Dominoes fall in the crypto market and beyond.

- FTX’s meltdown has got many calling for exchanges to declare their proof-of-reserve.

Keywords: FTX, liquidity, Crunch, Domino effect, bankruptcy, filing, Sam bankman, SBF, regulators.

- Cherokee Acquisition, an investment banking firm focused on bankruptcy claims & distress asset investment, has put a distress price tag of 8-10 cents on a dollar for FTX-affected users. Creditors who are unwilling to participate in the supposed lengthy bankruptcy proceeding to recover some or all their assets may sell their credit claims for a distress token.

- Regulatory actions are closing in on FTX and its executives.

As expected, the catastrophic incidence that crumbled the FTX empire has started attracting regulatory-led investigations from both state & federal agencies, including the U.S. Securities and Exchange Commission, the Securities Commission of the Bahamas, U.S. Department of Justice.

According to the court filing document on Monday, FTX creditors may be more than 1 million creditors. FTX also filed a motion to handle its group of entities as a whole rather than treating its various subsidiaries as individual cases.

- More entities continue to disclose their exposure. Among these, the Kong-based digital asset platform, New Huo Technologies Holdings Limited, claimed $13.2 million of client funds & $4.9 million of Hbit assets are exposed to the FTX turmoil. Also In light of FTX’s fall, shareholder, sponsorship deals, and naming rights of sports stadiums have been terminated.

- Almost 4,000 people have issued a petition on the CryptoLaw petition app against the United States Securities and Exchange Commission head, Gary Gensler, over the FTX liquidity crunch. The petition was raised following a suspicion that the SEC might give a regulatory free pass to Sam Bankman over what they described as “FTX fraud”.

Sceptics have questioned whether authorities will be motivated to pursue the case due to the said between Gensler, SBF, and other elites — in Washington or elsewhere.

- The FTX liquidity crunch has also prompted a bank run situation. Many have withdrawn their funds from exchanges en masse and took a safety with self-custody wallets. To this end, TWT Trust Wallet’s utility token has rallied up 225%, making it one of the year’s best-performing assets. Also, TWT trading volume has increased from 279 million TWT to 593.25 TWT in the same period.

Source: Glassnode. Ethereum balance on FTX.

A flashback into the FTX turmoil

Source: Coindesk

The trend of the FTX collapse can be traced from the Nov 2 unveiling incidence of Alameda’s balance sheet details. It reveals that Sam-bankman Fried's other company, Alameda research trading firm, invested in a large portion of FTX’s exchange token, FTT.

According to Coindesk, Alameda's assets in June were about $14.6 billion, with $3.66 billion worth of FTT tokens (unlocked FTT) and $2.16 billion of “FTT collateral.

In response to the shocking disclosure by Coindesk, Changpeng Zhao, Binance CEO, tweeted that they have decided to liquidate the remaining FTT from $2.1 billion worth of BUSD & FTT, received as part of Binance’s exit from FTX equity last year to mitigate the market impact.

However, this development amplified fear, volatility, and withdrawal within the FTX exchange. The situation worsened on NOV 8 when multiple customers faced withdrawal difficulty.

Also, on 8 Nov, the CEO of Binance announced that they had signed a non-binding agreement with FTX to fully acquire FTX and mitigate the current liquid crunch.

The agreement, which was only going to hold following scrutiny, covered the acquisition of FTX’s non-U.S assets. As speculations suggested, the agreement failed due to the financial holes surrounding FTX’s book.

Binance pulled out of the Non-binding agreement to acquire FTX after reviewing the company's financials.

From the events surrounding the liquidity crunch, many spectators could conclude that Changpeng Zhao contributed largely to the catastrophic end of the crypto giant, although it is an unclear fact. At the time of writing, The FTT token has been traded between $1.25 & $1.96 in the last 24 hours and the formal billionaire CEO is no longer ranked under the Bloomberg billionaire index.

CZ tweeted-“Liquidating our FTT is just post-exit risk management, learning from LUNA,” he wrote. “We gave support before, but we won't pretend to make love after divorce. We are not against anyone. But we won't support people who lobby against other industry players behind their backs. Onwards.”

Bankruptcy filing & Unauthorized transfer of funds exceeding $600M further ruptured the collapsing FTX

on Friday morning, FTX and Alameda Research filed a Chapter 11 bankruptcy petition in the U.S. Bankruptcy Court of Delaware. The bankruptcy petition indicates that FTX Trading has $10 billion to $50 billion in assets and liabilities ranging between $10 billion to $50 billion and over 100,000 creditors.

Also, according to CNBC reports, about 130 additional affiliated companies are in the proceedings, including Alameda Research and FTX.us.

In the same vein, Bankman-Fried has stepped down as CEO and was replaced by John J. Ray III.

According to Ray, “The immediate relief of Chapter 11 is appropriate to provide the FTX Group the opportunity to assess its situation and develop a process to maximize recoveries for stakeholders,”

Following the bankruptcy filing, reports showed that FTX wallets witnessed a drain of funds exceeding $600 million. According to an administrator in the FTX Telegram chat; "FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don't go on FTX site as it might download Trojans,"

In response to countless reports, the new leadership stated that they would remove trading and withdrawal functionality and move all traceable assets to a new cold wallet custodian.

Ray also mentioned that the company’s executives were in contact with law enforcement and relevant regulators to curb the situation.

Source: Twitter

On Twitter, some crypto enthusiasts speculated that the outflows resemble a coordinated effort from Bankman-Fried's inner circle. Their claims were hinged on the simultaneous and sophisticated nature of the hacks on FTX and FTX US.

FTX crash likely to initiate Domino Effect