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After FTX’s collapse, the cryptocurrency exchange was once valued at $32 billion, much of the attention focused on the now-defunct firm’s most prominent investors and celebrity backers.

But with more than 1 million creditors, many young and mom-and-pop investors will be left holding the bag.

A bankruptcy hearing scheduled for Friday at 10 a.m. could shed more light on the full spectrum of those who lost money in the FTX implosion. The hearing will consider the full list of FTX’s creditors, including their names and e-mails. petition to publish addresses.

Sheila Bair, former chairman of the Federal Deposit Insurance Corporation (FDIC), recently told Fox Business that the real tragedy of the FTX collapse is that “there are probably millions of much smaller investors, and proportionally, those who will really suffer.”

Former US ATTORNEY.

The FTX logo is seen at the entrance to the FTX Arena in Miami on November 12, 2022. (REUTERS/Marco Bello/File Photo/Reuters Photos)

Bair noted that FTX and the crypto industry in general have marketed heavily to young people, and said it “sads” him that so many who bought into the company’s appeal are unlikely to recoup their investment.

He suggested that to prevent such a future collapse, crypto exchanges should be required to show proof of reserves and that some regulatory enforcement be implemented.

SAM BENKMAN-FRIED IN THE BAHAMAS REFUSED TO BOOK BOOK UNTIL FEBRUARY. 8 ALLEGED CRYPTO GAMBLING SCHEME

FTX’s current CEO, John J. Ray III, the corporate restructuring expert who oversaw the bankruptcy of energy trader Enron, testified before the House Financial Services Committee on Tuesday and said clients investing in FTX and its affiliates should not expect tie a full recovery of their investment.

“We’ll never get all these assets back,” Ray said bluntly.

SBF is taken to a car

Samuel Bankman-Fried leaves the Nassau courthouse in the Bahamas on Tuesday. (Mega for Fox News Digital / Fox News)

In its preliminary filings in the early stages of bankruptcy proceedings, FTX said it owed more than $3 billion to its 50 largest unsecured creditors. At the time, the company could identify 100,000 creditors it was aware of, most of whom were FTX customers.

However, since the bankruptcy of FTX and its more than 130 affiliates could also affect former customers and others, the total number of creditors could eventually exceed 1 million.

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FTX CEO Sam Bankman-Fried

Sam Bankman-Fried, founder and former CEO of cryptocurrency derivatives exchange FTX, speaks on an episode of Bloomberg Wealth during an interview with David Rubenstein on Aug. 17, 2022, in New York. (Gina Moon/Bloomberg via Getty Images/Getty Images)

FTX founder and former CEO Sam Bankman-Fried was arrested by authorities in the Bahamas on Monday and is expected to be extradited later.

Federal prosecutors announced Tuesday that Bankman-Fried has been indicted on eight U.S. counts that carry a total maximum sentence of 115 years in prison. Charges against him include defrauding clients, plus a conspiracy charge; fraud on lenders, plus a conspiracy charge; product fraud, securities fraud, money laundering, and conspiring to violate campaign finance laws.

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Damian Williams, the U.S. Attorney for the Southern District of New York, said the Bankman-Fried case, which drew comparisons: Bernie Madoff’s Ponzi scheme and the Enron scandalwill go down as “one of the greatest frauds in American history.”

Fox Business’ Breck Dumas contributed to this story.

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