Billions of dollars vanish as FTX crashes, while crypto market loses $32 billion in value

Following last week's event where FTX, one of the top global crypto exchange companies crumbled and filed for bankruptcy, at least $1 billion of customer funds have vanished from collapsed crypto exchange FTX, Reuters reported.

The exchange's founder Sam Bankman-Fried secretly transferred $10 billion of customer funds from FTX to Bankman-Fried's trading company Alameda Research, insiders told Reuters.

A large portion of that total has since disappeared, they said. One source put the missing amount at about $1.7 billion. The other said the gap was between $1 billion and $2 billion.

FTX, last week saw one of the biggest slumps in the crypto world, losing over $32 billion in market valuation over a few days in, as a result of a hole in the balance sheet of its sister company, Alameda research, resulting in a cascade of events that led to the company's demise.

Investors started pulling funds in a frantic reaction to the uncertainties surrounding the company's future causing it to lose liquidity. It was later dealt the final straw when the rival crypto company, Binance, pulled out of its acquisition deal, which was ultimately supposed to save the company.

The crypto exchange company eventually filed for bankruptcy in the US on Friday last week dealing a huge blow to several companies globally with assets held in the crypto firm.

As the full effect of the implosion of the crypto firm continues to take shape, several companies that suffered the blowback are making adjustments to operations and restructuring.

BlockFi, a crypto lending platform that Mr Bankman-Fried had helped finance, said this past week that it was suspending operations as a result of the collapse. The price of Solana, a cryptocurrency that Sam Bankman-Fried promoted heavily, has crashed. And the team behind the FTX Future Fund, a charitable operation he bankrolled announced their resignations.

There have also been reports of other crypto startups including Nestcoin, Galois Capital, Genesis Trading, and Multicoin Capital with substantial investment tied up in the crypto firm, that may have lost their savings as a result of this development.

In an initial filing of bankruptcy on Friday, FTX said it had more than 100,000 creditors. How much those customers are repaid will depend on the bankruptcy process.