Tuesday, June 6, 2023
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FTX has at least 1 million creditors, more than 10 times its previous claim

When cryptocurrency exchange FTX filed for bankruptcy last week, it said it owed money to around 100,000 creditors. A filing on Tuesday put the figure at more than 1 million.

The company’s lawyers stated in the filing that the case was complex, involving more than a hundred debtor entities on FTX’s side and more than a million creditors — primarily FTX customers.

While bankruptcy law typically requires FTX and its affiliates to file a list of the top 20 creditors for each debtor entity, such as FTX, FTX US, and Alameda Research, its attorneys have requested permission to file the top 50 A comprehensive list of companies and organizations owed because there is so much overlap among these companies. If the request is approved, the company plans to submit a top 50 list by Friday.

“Compiling a separate list of creditors for each debtor would consume debtors at this juncture,” the filing reads. Commodity Futures Trading Commission, and other federal, state, and international agencies.

“These events are of great interest to regulators around the world,” the filing reads.

Last week, FTX founder and CEO Sam Bankman-Fried resigned and the company named John J. Ray III, who helped creditors recover from troubled The company recovers the funds. As the CEO of more than 100 FTX-related entities, he hopes to take on the role again.

FTX’s bankruptcy comes after two other cryptocurrency firms, Celsius and Voyager Digital, filed for bankruptcy earlier this year and could drag customers into a lengthy process as they seek repayments. In Celsius, the customers were named “unsecured creditors,” while in Voyager they were “impaired” claimants. Neither designation guarantees that customers will get their money back anytime soon, if at all.

After a week-long saga as FTX faced a liquidity crunch, the firm believes it has found salvation in cryptocurrency exchange Binance, which was acquired by a competitor. But after CEO Changpeng Zhao “CZ” initially agreed to buy FTX, CZ withdrew from the deal, saying FTX’s “problems were beyond our control or ability to help.”

The SEC and DOJ are now working on Circling as some accuse SBF of mishandling FTX client funds. Bankman-Fried has denied the allegations.

As FTX’s lawyers noted in Tuesday’s filing: “The events that have befallen FTX over the past week are unprecedented.”

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