Bankrupt FTX Trading owes creditors more than $3 billion
FTX Trading owes its creditors at least $3.1 billion, according to court documents filed by the bankrupt cryptocurrency exchange.
A list of the company's top 50 creditors was submitted by FTX to a Delaware bankruptcy judge on Saturday. FTX doesn't name the 50 creditors in the court filing, but categorizes the nature of each claim as "customer."
Once a darling of the crypto world, FTX raised almost $2 billion from venture capital and other investors in three years. The Bahamas-based company crashed in spectacular fashion this month, sending shockwaves throughout the crypto industry when it declared Chapter 11 bankruptcy.
Equally dramatic is the fall of former CEO Sam Bankman-Fried, who resigned from the company and is now under investigation in the U.S. and abroad for possible securities violations.
Alvarez & Marsal, an accounting firm FTX hired to help with its bankruptcy, asked the judge on Sunday for extra time to file more documents in the case. FTX "historically did not keep reliable books and records" and the firm is "working to access certain sources of data and records that are currently unavailable," its managing director Edgar Mosley II said in court documents.
A hearing before a bankruptcy judge is scheduled for Tuesday.
"Complete failure"
FTX's problems first came to light earlier this month when Bankman-Fried told a group of investors that the company needed about $8 billion to back up its users' crypto assets. He also warned that without an imminent infusion of cash the company might have to file for bankruptcy.
New CEO John Ray III noted some of the lax business practices at the company in a court filing last week. Among those shortcomings he said occurred under former CEO Sam Bankman-Fried was that the company communicated on an application that auto-deleted messages often.
"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," said Ray, who has decades of experience guiding companies — including Enron — through bankruptcy, in court documents filed last week.
FTX's move marks the third crypto company to seek bankruptcy protection this year, following Voyager Digital and Celsius Network. The filing also clouds the fate of BlockFi, a crypto lender that FTX helped bail out with $400 million earlier this year.
Court documents FTX filed also show other detailed financial statements, some of which reveal that FTX had $1.3 billion in assets and owed $102 million to customers the day the company filed for bankruptcy. Ray said last week that those figures are questionable because they were recorded when Bankman-Fried was still at the helm and the company's business practices were "unacceptable."
