Collapsed Crypto Alternate FTX Owes High 50 Collectors $Three Billion: Submitting

FTX filed for bankruptcy in the US on November 11, 2022, seeking legal protection as it seeks a way to return funds to users.

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The embattled cryptocurrency exchange FTX owes its creditors more than $3 billion, a new filing revealed over the weekend.

A list of FTX’s top 50 unsecured creditors, excluding their names and other identifiable information, shows that the largest of them all is owed more than $226 million. The second largest unsecured creditor claims over $203 million in unpaid debt from FTX.

In total, unsecured receivables – marked as such because they were not secured by any collateral – totaled $3.1 billion. According to a previous bankruptcy filing, FTX may have more than 1 million creditors.

FTX’s disgraced founder, Sam Bankman-Fried, resigned as CEO earlier this month when the company filed for Chapter 11 bankruptcy protection.

FTX, which was once valued at $32 billion, collapsed within days after the CEO of Binance, a rival firm, said its exchange would liquidate its FTT tokens. FTT, FTX’s native token, then crashed, leading to a liquidity crisis in FTX.

The Securities and Exchange Commission and the Department of Justice are reportedly investigating what happened.

Bitcoin and other cryptocurrencies traded lower on Monday. More than $260 billion has been taken from the value of the crypto market since Zhao’s Nov. 6 tweet.

Bankman-Fried has been accused of blatant mismanagement and fraud by his peers in the crypto industry.

According to previous CNBC reports, his exchange allegedly used client funds to make risky trades.

In a scathing report on FTX’s demise last week, new CEO John Ray III said many of the companies in the FTX group “didn’t have adequate corporate governance.”

On Thursday, FTX announced that it has credible evidence that the exchange placed assets in the care of the Bahamian government.

The company’s new boss is now trying to sell or restructure his global empire.

Neither FTX nor Bankman-Fried were available for comment when contacted by CNBC on Monday.

Crypto investors have been burned down this year by a series of high-profile mistakes that have created ripple effects. Earlier this year, the collapse of the so-called stablecoin terraUSD had knock-on effects on a number of companies and contributed to the fall of major hedge fund Three Arrows Capital.

The recent collapse that shook the market has raised questions about the opacity of large companies in crypto, an industry often touted as more decentralized and transparent than traditional finance.

Bank of England Deputy Governor Jon Cunliffe said the FTX debacle gave regulators a greater impetus to respond to crypto.

“We shouldn’t wait until it’s big and connected to develop the regulatory framework necessary to prevent a crypto shock that could have a much larger destabilizing effect,” Cunliffe said in a speech Monday of the Warwick Business School.

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