Since crypto-currency exchange FTX filed for bankruptcy, administrators have been investigating the damage the crypto-currency company has done. On Saturday, November 19, documents filed in Chapter 11 bankruptcy protection proceedings showed that crypto-currency exchange FTX owes more than $3 billion to its top 50 creditors. The names of the creditors remain unidentified at this time. However, the largest amount FTX owes to a single creditor is $225 million.
The hole in FTX’s books is bigger than expected. Bankrupt crypto-currency exchange FTX has reported that it owes more than $1.45 billion to its top 10 creditors. In total, the amount is $1.45 billion.
Last Saturday’s filing showed that the Chapter 11 or Chapter 9 proceedings should involve the list of creditors with the 50 largest unsecured claims. However, all amounts currently listed are subject to further investigation. The filing also added:
“The top 50 list is based on the Debtors’ currently available creditor information, including customer information that may have been accessed but is not otherwise available at this time. The Debtors’ investigation is ongoing regarding the amounts listed, including payments that may have been made but are not yet reflected in the Debtors’ books and records.”
With over a million users, the FTX bankruptcy is certainly one of the most high-profile explosions in the crypto space. On Saturday, the bankrupt crypto exchange said it had launched a strategic review of global assets and was also working to sell/reorganize some of its operations.
FTX contagion spreads through the market
The contagion from the FTX collapse is spreading quickly and wildly throughout the crypto space. According to recent reports, crypto lender BlockFi is about to announce its bankruptcy. FTX’s collapse has put BlockFi in deep trouble and a bigger hole in its balance sheet.
On the other hand, market analysts are calling for tighter regulatory rules for the crypto space. Speaking to Bloomberg TV, Christian Catalini, founder of the MIT Cryptoeconomics Lab, said:
“FTX’s problems are really an urgent reminder of the need for regulatory clarity and a true regulatory framework for crypto. The hype and speculation around token coining and trading “has generated a massive distraction from building real products and services that reach consumers, solve real problems.”
Amid the FTX collapse, other popular crypto exchanges are also facing heat. Popular crypto exchange platforms like Crypto.com and Binance are struggling to reassure the market of their stability.
Another report also suggests that FTX Europe was recently seeking a trading license in Switzerland. It filed an application with Swiss banking regulator FINMA for a so-called “organized trading system“. However, the request was denied at this time.