Foremost cryptocurrency exchange company, FTX, which filed for the United States (U.S) bankruptcy court protection, has revealed it owes its 50 biggest creditors nearly $3.1 billion.
FTX is a Bahamas-based cryptocurrency exchange. The exchange was founded in 2019 and, at its peak in 2021, had over one million users and was the third-largest crypto exchange across the globe by volume.
In the court filing made on Saturday 19th of November, 2022, the exchange corporation confirmed it owes its top ten creditors alone, around $1.45 billion – declining to mention their names.
Since 11 November 2022, FTX has been in bankruptcy proceedings in the US court system following a liquidity crisis.
FTX and its affiliates filed for bankruptcy in Delaware on November 11, in one of the highest-profile crypto deals, rendering almost 1 million customers, including other investors to face total losses in the billions of dollars.
FTX on Saturday assured it has launched a strategic review of its global assets; preparing the sale of some assets; and reorganization of some sister businesses. A hearing on FTX’s so-called first-day motions commenced on Tuesday 22nd of November 2022, before a U.S. bankruptcy judge in a separate court filing.
Investors King learnt the collapse of FTX impacted negatively on the cryptocurrency industry, by extension reducing the paper fortune of its 30-year-old founder, Sam Bankman-Fried, from more than $15 billion to almost nothing within days.
The sudden implosion of FTX prompted financial experts to clamour for a mechanism capable of bringing crypto within the regulatory framework.
Investment analyst, Jon Cunliffe, at an event organized by Warwick Business School said “While the crypto world is not at present large enough or interconnected enough with mainstream finance to threaten the stability of the financial system, its links with mainstream finance have been developing rapidly.”
Cunliffe warned “We should not wait until it is large and connected to develop the regulatory frameworks necessary to prevent a crypto shock that could have a much greater destabilising impact.”
FTX recently gained the support of top-notch investors such as Sequoia Capital; the world’s largest asset manager BlackRock; and a handful of known hedge fund managers. It also enjoyed celebrity endorsements American football star, Tom Brady, and comedian Larry David.