New filing shows that FTX owes more than $3 Bn from 50 investors

    Tanya Sharma
    Tanya Sharma
    Published on November 21, 2022 6:54 PM

    Updated on January 10, 2023 2:20 PM

    According to recent court documents, the 50 largest unsecured creditors of Sam Bankman-Fried's defunct crypto empire FTX are owed more than $3 billion.
    New filing shows that FTX owes more than $3 Bn from 50 investors
    Source: Reuters

    50 creditors fear losing funds

    In a court filing on Saturday, FTX, the cryptocurrency exchange that failed earlier this month and sought bankruptcy protection, stated that it owed its 50 biggest creditors more than $3 billion.

    The top 10 creditors of the defunct exchange are owed around $1.45 billion. Redactions have been made to the creditors' names.

    Sam Bankman-successor Fried's CEO of FTX, John Ray III, also announced on Saturday that the business had started a strategic evaluation of the exchange's assets.

    Before a liquidity problem that caused the firm to fail earlier this month, FTX had a valuation of about $32 billion and was the third-largest exchange in the world. Before resigning on November 11, Bankman-Fried declared that FTX, his trading company Alameda Research, and related entities would declare bankruptcy.

    The numerous individuals and organizations involved in FTX's insolvency include the creditors, whose identities and whereabouts weren't made public. All 50 of the highest claims are from clients who owe $21 million or more.

    The information came to light after Nov filling

    As part of bankruptcy procedures, insolvent corporations in the US are forced to reveal information regarding their obligations. Creditors will decide the optimum manner for FTX to pay back its obligations as the bankruptcy process progresses.

    RELATED:  Head of US panel questions the FTX management for information

    In its initial court documents, FTX claimed that its assets and liabilities were at least $10 billion apiece. FTX's attorneys believe the action may involve more than one million creditors.

    In a different court filing this week, Ray, a lawyer who managed the $23 billion bankruptcy of energy company Enron, stated that he "did not have faith" in FTX's balance statements.

    "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here," 一 In a petition on November 17, Ray stated.

    He added, "From compromised systems integrity and faulty regulatory oversight abroad to the concentration of control in the hands of a tiny group of inexperienced, unsophisticated, and potentially compromised individuals, this situation is unprecedented."

    “Some of these subsidiaries – such as LedgerX LLC and Embed Clearing LLC, for example – are not debtors in the chapter 11 cases. Other subsidiaries – such as FTX Japan KK, Quoine Pte. Ltd, FTX Turkey Teknoloji Ve Ticaret A.Ş., FTX EU Ltd, FTX Exchange FZE and Zubr Exchange Ltd – are debtors. Either way, it will be a priority of ours in the coming weeks to explore sales, recapitalizations or other strategic transactions with respect to these subsidiaries, and others that we identify as our work continues,” - He continued