More than a million people and businesses could be owed money following the collapse of the crypto exchange FTX, according to bankruptcy filings.

In the final days before declaring bankruptcy, FTX chief executive Sam Bankman-Fried attempted a final fund raising in order restore stability.

The balance sheet he sent around to prospective investors is reported to have revealed the exchange had nearly $9billion (£7.58billion) in liabilities, while only having just over $1billion (£840million) in liquid assets.

There were also $5.4billion (£4.55billion) in assets labelled as "less liquid" and $3.2billion (£2.69billion) labelled as "illiquid".

The BBC says it's a worrying time for individuals who have money in the business.

In the UK, crypto assets are largely unregulated, and experts and financial watchdogs warn there's little protection for consumers.

Crypto assets

Despite strong warnings from watchdogs about the risk of crypto investments, around 6.7million people in the UK own or have bought crypto assets - close to one-tenth of the population.

In September, financial watchdog the Financial Conduct Authority warned that FTX may have been providing financial services or products in the UK without its authorisation.

It said bluntly: "You are unlikely to get your money back if things go wrong."

Gavin Brown, associate professor in financial technology at the University of Liverpool, pointed to a recent report which suggested that "42% of exchanges which failed simply disappeared without a trace".

There is a liquidation process at FTX, which will divide up the remains of the firm among those to whom it owes money.

But the bankruptcy may not provide much comfort.

On the hook

Prof Brown told the BBC: "In the event of exchange failure, or even bankruptcy, it is the investors who are on the hook for losses."

Small investors often go to the back of the queue when what remains of a crypto business is divided up among creditors.

Experts doubt much money will be coming back.

"The unfortunate news is that the money's all gone. It's just not there any more. Investors should expect pennies on the dollar," said crypto blogger and author David Gerard.

Mr Gerard argued that, in many of these failures, there are "real liabilities but imaginary assets" and that a huge proportion of the assets are in exchanges' own tokens - such as FTX's FTT token - to which "they've assigned a spurious value in the billions".

FTSE 100

The UK's top share index, the FTSE 100, was up two points at 7,371 shortly after opening this morning, following yesterday's 15-point loss.

Brent crude futures dipped by 0.56% to $93.33 a barrel.

Companies reporting today

  • Full-year results: Sage Group
  • Half-year results: British Land, Experian, Premier Foods, SSE

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