FTX struck with major debt to 50 creditors
Image source: The Block
FTX, the well-known cryptocurrency, has been in trouble for the past few weeks.
FTX owes $3.1 billion to its top 50 creditors, according to documents filed Saturday in Delaware bankruptcy court.
The document clarifies the extent of potential losses suffered by clients.
According to Saturday’s filing, the crypto exchange’s top 10 creditors each have more than $100 million in unsecured claims.
The claims total more than $1.45 billion.
The filing explained that the debt does not include anything owed to company insiders.
However, this may change with additional information.
FTX owes its largest creditor more than $276 million.
The company now owes around $21 million to its 50th largest creditor.
Despite the enormous debt, the filing can only scratch the surface of what the company owes.
Last week, FTX said it could have over a million creditors.
The company owes its third-largest creditor $174 million.
Although unconfirmed, the figure matches what Genisis, a cryptocurrency lender, announced ten days ago: $175 million in funds locked in its FTX trading account.
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A notice accompanying the filing explains that FTX based the totals on information that can be seen but was not accessible.
The notice says the company was unable to access customer data fully.
FTX, led by new chief executive John J. Ray III, said in the filing that its debt numbers might be inaccurate.
There may be payments to creditors that need to be reflected in the books or records of the company.
A request was filed to withhold information about FTX’s creditors and their personal information.
In addition, the motion says disclosing creditors’ names could give predatory companies a lead.
“Public dissemination of the Debtors’ customer list could give the competitors an unfair advantage to contact and poach those customers, and would interfere with the Debtors’ ability to sell their assets and maximize value for their estates at the appropriate time.”
“The Debtors historically did not keep appropriate books and records,” it continued.
“[And] the Debtors are currently working to access certain sources of data and records that are currently unavailable.”
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Chapter 11 cases
The decision to create a list of FTX creditors came from overlapping creditors in its Chapter 11 cases, unorganized filing, and limited time and resources.
“Creditor information, and in particular customer information, is not clearly labeled or identifiable by [FTX],” the motion reads.
“As a result, presenting the information on a consolidated basis will ensure the most relevant and known information can be promptly disclosed.”
A date is ready for the “first day of hearing” in FTX’s bankruptcy proceedings.
As a result, it will take place in Wilmington, Delaware, on Tuesday.
FTX says it owes over $3 billion to its 50 largest creditors