Collapsed cryptocurrency exchange FTX owes its 50 largest creditors almost $3.1 billion (£2.6 billion), according to a filing in a US bankruptcy court.
The exchange owes about $1.45 billion to its top 10 creditors, it said in a court filing over the weekend, without naming them. The largest creditor is owed $226 million.
FTX’s collapse rocked the cryptocurrency industry and reduced the fortune of its 30-year-old founder Sam Bankman-Fried’s paper from more than $15 billion to next to nothing in a matter of days.
FTX and its affiliates filed for bankruptcy in Delaware on Nov. 11, leaving roughly one million in creditors, though the full extent of the losses due to alleged poor record-keeping is not yet known . The company said on Saturday that at least 101 companies around the world were part of the bankruptcy proceedings.
The exchange was the world’s second largest until concerns about its solvency led to a surge in withdrawals, exposing that it did not have the billions of dollars worth of assets it claimed.
The company, which has been taken over by bankruptcy experts, said on Saturday it had begun a strategic review of its global assets and was preparing for the sale or reorganization of some businesses, with the hiring of investment bank Perella Weinberg Partners . A hearing on FTX’s first-day motions is set for Tuesday morning before a U.S. bankruptcy judge, according to a separate court filing.
FTX warned on Sunday that the stolen cryptocurrency in the final stages of its collapse was being transferred to other exchanges. The allegedly stolen cryptocurrency was worth $270 million on Sunday, according to analysts who tracked the transactions. FTX asked other exchanges to help return the assets to the bankruptcy court.
(1/2) Exchanges should note that certain funds transferred from FTX Global and related debtors without authorization on 11/22/11 are being transferred to them via intermediate wallets.
— FTX (@FTX_Official) November 20, 2022
FTX had been backed by prominent investors including venture capital firm Sequoia Capital, the world’s largest asset manager BlackRock and a number of well-known hedge fund managers. He also paid for celebrity endorsements such as American football star Tom Brady and comedian Larry David.
The company has named John Ray III, a restructuring expert who previously oversaw the bankruptcy of Enron, one of the most notorious and largest corporate frauds in US history, as CEO. In a filing in Delaware’s bankruptcy court, he wrote: “Never in my career have I seen such a complete failure of corporate controls and such a complete absence of reliable financial reporting as occurred here.”
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Speaking on Monday, a Bank of England deputy governor said the implosion of FTX showed the need to bring crypto into the regulatory framework.
“While the world of crypto… is not currently large enough or sufficiently interconnected with mainstream finance to threaten the stability of the financial system, its links to mainstream finance have been developing rapidly,” he said Jon Cunliffe at a Warwick Business School event.
“We don’t have to wait until it’s big and connected to develop the regulatory frameworks needed to avoid a crypto crash that could have a much larger destabilizing impact,” he added.