FTX in deep waters – owes $3.1 billion to at least 50 top creditors

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FTX Logo

Key points:

  • According to court documents, FTX owes $3.1 billion to at least 50 creditors.
  • The crypto exchange filed for bankruptcy earlier this month after it collapsed.
  • The court filing has not listed the names of creditors in the court filing. 

Documents from a recent filing state that crypto-exchange FTX owes creditors around $3.1 billion. The Bahamas-based crypto exchange filed for US bankruptcy court protection earlier this month. The documents show FTX owes nearly $1.45 billion to the top 10 creditors. However, the documents do not name them. 

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FTX files for bankruptcy

In one of the most publicised crypto collapses, FTX and its affiliates filed for bankruptcy in Delaware on November 11. As a result, they project about million consumers and other investors to lose billions of dollars. The company’s value reached its peak of $32 billion in January this year. 

The document does not contain the names of all 50 creditors to whom FTX owes money. FTX was ordered to provide the court with a list of its 50 greatest creditors, which can be people or businesses, as part of the bankruptcy proceedings. According to a court document, the second-largest entity is owed $203.29 million.

The cryptocurrency exchange announced on Saturday that it has started a strategic evaluation of its worldwide assets and is putting some firms up for sale or reorganisation. According to a different court filing, a hearing on FTX’s so-called first-day motions is scheduled for Tuesday morning before a US bankruptcy judge.

One of the biggest and most influential participants in the cryptocurrency sector saw a spectacular decline with the swift collapse of FTX. The FTX Group stated it has had discussions with “dozens” of US and international regulatory organisations, including the US Attorney’s Office, the US Securities and Exchange Commission, and the Commodity Futures Trading Commission. Besides, there may be over 1 million creditors in the US cases that have been filed already. 

John Ray who also oversaw the Enron bankruptcy case said that he has never witnessed a failure of corporate control and an outright absence of trustworthy financial information of this magnitude. He further said that this situation is unprecedented, with compromised system integrity, poor regulatory monitoring from abroad, and the concentration of power in the hands of a relatively small number of uneducated and maybe compromised people.

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Image Source: FTX

 

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Karandeep is a technical content writer based out of Pune, a city in India that is also known as the Oxford of the East. His journey with writing started in 2014 when he decided to try his luck in a gaming startup as a Content Developer. Since then, he has written on a wide range of topics within the gaming and the tech space. Apart from his love for gaming, Karandeep is keeping tabs on the hottest trends in the tech industry. After completing his Bachelors in Business Administration (BBA) from Symbiosis International University, Pune, he worked as an intern in an NGO that focused on urban development.
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