FTX Situation Update – Top 50 Creditor Profile Revealed

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2022-11-26 02:35:56

A list of the top 50 creditors of the FTX group of companies was filed in bankruptcy court and totaled $3.1 billion.

The top two creditors are owed $226 million and £203 million. No creditor’s names were included in the list, in keeping with FTX’s requirement to protect the identities of its customers for business competition reasons.

With the 50th largest creditor, FTX is owed $21.3 million.

Today’s filing reveals the first specifics regarding the form of liabilities of FTX companies, which are said to amount to around $10 billion.

Cryptocurrency prices falter after news of FTX

The price of bitcoin and other cryptocurrencies has weakened since this news emerged, with the total crypto market capitalization down 1.93% to $821 billion. As of 4:30 pm on November 22, 2022, Bitcoin is down 1.92% in the past 24 hours, trading at $15,709, Ethereum is down 3% at $1,166, and Dogecoin is down 6% at $0.079.

Related: Cryptocurrency Markets 11/22 CHK: Bitcoin Sets New Low of the Year, Markets Are Red With Falling Momentum Over the Last Two Days

However, FTX’s “poor” record-keeping means that new CEO John Ray cannot be entirely certain that the top 50 list is accurate.

In addition, the delay in listing, which is a requirement of Chapter 11 bankruptcy proceedings, is due to the poor records of the FTX companies.

In the notice filed with the court it says; “…The Top 50 list is based on the Debtor’s existing creditor information, including customer information that is viewable but not accessible at this time. The Debtor’s investigation continues regarding the amounts listed, including payments that may have been made but not yet reflected on the Debtor’s books and records. Debtors are also working to get full access to customer data.”

Mr Ray described the administration at FTX as “a complete failure of the company’s control” and the worst he had ever seen in his career, including cleaning up the mess after Enron’s infamous demise in 2007.

List of Top Creditors of FTX

The consolidated list of creditors shows the largest unsecured claims, although secured creditors may be included when collateral is currently insufficient, thus placing the creditor on the list. claims are not guaranteed.

The top 10 creditors alone, FTX owes each of them more than $100 million and is likely to include hedge funds and other financial firms that trade on the exchange, as well as crypto institutions. as a lender.

FTX can have up to a million creditors, and seniority disputes will determine which will be paid first.

This topic has become something of controversy in other crypto bankruptcies, such as Voyager Digital, whether a financial institution with an account at a crypto exchange is high debt. over the debt of other unsecured creditors such as retail customers or not.

Cryptocurrency exchanges are constituted in ways that are markedly different from the division of labor that exists in traditional finance. Companies like FTX are part bank, part broker-dealer and part exchange. That means they will act as custodians and hold large amounts of capital on behalf of clients.

Former FTX directors were all fired, CEO Ray received a salary of $ 1,300 / hour

In other court documents, a group of people close to Sam Bankman-Fried Caroline Ellison, Gary Wang and Nishad Singh have all been fired.

In addition, the total number of FTX employees at the time of filing for bankruptcy was 330 people based in 29 countries, in addition to contractors. Of the directly employed employees, 140 work in the United States.

The documents state that “Debtor continues to review personnel matters and anticipates, based on the nature of Debtor’s business, that a large number of Employees will need to continue to work for Debtor during near future.”

CEO John Ray is being paid $1,300 for an hour of work and a $200,000 retainer fee.

The first day of hearing will take place on Tuesday, November 22 at 11 a.m. ET, with Judge John T Dorsey Presiding.

Vitalik Buterin: “Anything in focus is suspected by default”

Elsewhere, Vitalik Buterin, the co-founder of Ethereum, described the FTX explosion as a “great tragedy”.

“That said, many in the Ethereum community also see this situation as confirmation of what they have long believed: anything centralized is by default suspect.”

For Buterin, the case is a testament to the correctness of placing trust in “open code that is transparent to each individual”. He noted that the DeFi protocols worked “perfectly”. Regarding Sam Bankman-Fried, Buterin commented that:

"...Sam is a man who deserves to be loved, and I hope he has friends and family who can give that to him."
“…Sam is a man who deserves to be loved, and I hope he has friends and family who can give that to him.”

Tweet: https://twitter.com/VitalikButerin/status/1591643652815831040

Additionally, Bitcoin’s relative strength bodes well for future recovery, according to one trader: “Elsewhere, centralized exchanges continue to try to convey their credibility. .”

Coinbase advertised in the Wall Street Journal for “the trust they should get”:

Tweet: https://twitter.com/coinbase/status/1593328815547174912

Next week could be in the story of the spread of FTX, which could see the Digital Currency Group (DCG) at the center of attention and especially the two companies it owns, Genesis and Grayscale Investments, the latter company is the issuer of the Grayscale Bitcoin Trust (GBTC).

Unconfirmed rumors (see tweet below) are circulating that a previously undisclosed promissory note shows DCG owes Genesis $1.1 billion. Last week, Genesis halted withdrawals from its profitable Genesis Earn product.

Tweet: https://twitter.com/AP_ArchPublic/status/1594386225200234496

DCG is the largest conglomerate in the crypto space and owns news site Coindesk and invests in 200 companies, by some estimates. Research website Messari puts DCG’s disclosed VC investments at 114. DCG is a major investor in Messari.

Meanwhile, in France, respected broker Coinhouse revealed that they had been exposed to Genesis and as a result stopped withdrawing from their Top Savings Account.

In an exclusive interview with Cryptonews, CEO Nicolas Louvet talked about the need for better regulations in the industry and suggested that if more experts from the VC world join as well as rating agencies and independent auditor, then everything can be solved.

Coinhouse may have failed due diligence, though, they had no idea that FTX would fail and take out Genesis – or at least the company’s Monetization product – in the same process.

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