Russell Maher, Forex Brokers' managing director, told liquidators he blamed the failure on "too many 'out of money' contracts," and competition that forced him to adopt an overly-large position.
"I had tried to devised a plan to start returning investor funds and start scaling back the company until I could close it down, but I ran out of time and cash flow," Maher said.
Liquidators said they had been contacted by police and the FMA over the collapse.
"We will continue to assist these authorities with their investigation," they said.
Many of the creditors spoken to by the Herald in the past week are small-to-medium sized businesses which had a long-standing relationship with the company and used it to broker payments for imports.
One former creditor, an automobile importer owed nearly $500,000, said he had been with the company since 2011 but in 2015 was convinced by a Forex Brokers staff member to invest with the company.
"He told me 'We've got some investment opportunities, and Russell's very clever and making healthy returns," he said.
The creditor said there were red flags he was "naive" to have ignored in hindsight, including not have any written contracts or any regular balance updates.
"I was doing it on trust. I feel like a ****ing idiot. You should be able to trust anybody you've been dealing with for years," he said.
The FMA, which has previously said Forex Brokers didn't fall under its regulatory umbrella, expressed concern to the Herald over the characterisation of some of the losses as "investments".
"It's important for these clients to contact the FMA about these issues, and they should also raise their claims with the liquidator. Forex Brokers was only registered to provide spot FX services, so the FMA would have concerns if we discovered activity that appeared to be beyond the firm's registration," an spokesman for the regulator said.
Maher on Tuesday referred questions to his lawyer and did not immediately return calls this morning.
Ben Molloy, acting for Maher, said yesterday that his client would "deal directly with any enquiries from the Financial Markets Authority".
The Serious Fraud Office (SFO), which typically takes over from police in cases where losses exceed $5m and where investigation is warranted, said several creditors had contacted their office.
SFO director Julie Read said: "I advise that the SFO has received complaints in relation to Forex brokers and we are presently evaluating those complaints."
