As per a filing from its Chapter 11 bankruptcy protection proceedings, struggling cryptocurrency exchange FTX is now saddled with a debt that amounts to nearly $3.1 billion, and this amount is owed to its 50 biggest creditors.
These creditors – which include individuals and corporations alike – were required to be listed by FTX to the court as part of its bankruptcy proceedings.
FTX, which once ranked among the top cryptocurrency exchanges in the world, saw its fortunes turn from good to bad, and then to worse, over the course of a few weeks. The crypto exchange which once went toe-to-toe with, and provided competition to Binance, filed for bankruptcy in the US as it failed to battle a liquidity crunch, a rise in customer withdrawals that it could not handle, and the falling through of the one deal that could have bailed it out from its troubles.
And now, it faces the obligation to repay the debts it has incurred from its credits, who were not named in the filing; instead, they were listed as customers. And among the 50 biggest creditors, two are owed over $200 million, and almost half of the total amount – about $1.45 billion – is currently owed by the crypto exchange to its top 10 creditors.
And if this still doesn’t convince you of the trouble that FTX is in, you should note that the largest debt owed to a single creditor by the crypto exchange is a little over $226 million – $226,280,579, to be precise. The second-largest debt owed to a single creditor is $203 million ($203,292,504, to be exact).
Of course, they are far from being FTX’s only creditors, and the crypto exchange informed that it may have over a million creditors in total. FTX also claims to have assets and liabilities of at least $10 billion each.
“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,” John Ray, who has succeeded Sam Bankman-Fried as the CEO, after the latter quit and apologized on Twitter, said. “From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” he added.
Bankman-Fried, once the saviour of the crypto industry, is facing troubles of his own. It was his reign that saw FTX rise to new heights and reach its peak of $32 billion in valuation, and fall from grace to such lows that he had to resign from his post and the company is struggling. He will testify before Congress next month while FTX and Bankman-Fried’s handling of money is being investigated by authorities. The testifying also comes as recent media reports reveal nine members of the House Financial Services Committee have received money from FTX, the total amount of which comes to just over $300,000.
Unsurprisingly, the collapse and continued ill fortunes of FTX continue to hit the already volatile crypto industry, which has shrunk quite a bit this year. The prices of popular cryptos, which have already been sent reeling this year, continue to drop – Bitcoin has dropped to $16,127.40 while Ether is priced at $1132.41.
