FTX believes it may have 1 million creditors
A recent court filing reveals that the bankrupt cryptocurrency exchange FTX may have more than one million creditors.
FTX, the crypto exchange created by Sam Bankman-Fried that filed for bankruptcy last week, said that it may have more than one million creditors, indicating how difficult it would be to unravel this insolvency.
“As stated in the Debtors’ petitions, there are over 100,000 creditors in these Chapter 11 cases,” according to a document submitted to the federal court database system on Monday. In actuality, there may be more than a million creditors.
FTX filed motions to combine businesses together, as opposed to individualizing the proceedings, as part of the more than 100 dockets filed by the bankrupt crypto exchange company, which included sibling trading firm Alameda Research. The document states, “The debtors argue that cause exists to alter that requirement so that the debtors will provide a consolidated list of their top 50 creditors.”
Because its clients’ email addresses are already on file, FTX’s operators are also asking for the option to send bankruptcy notifications to creditors instead of mailing them to their physical addresses.
The document also referenced the hundreds of millions of dollars in crypto outflows that occurred last week, and the exchange says it has been in communication with U.S. authorities. A number of government agencies, including the SEC, CFTC, and the District Attorney’s office, may get involved. The unknown is the cause of the leak, which some believe was a hack or an inside operation.
FTX filed for Chapter 11 bankruptcy protection on Friday, claiming assets and liabilities between $10 billion and $50 billion and more than 100,000 creditors.
Monday’s court statement also implies that Friday’s Chapter 11 file was designated an emergency, stating: “FTX faced a serious financial problem that prompted the immediate filing of these lawsuits.”
Sam Bankman-Fried resigned on the same day that FTX filed for Chapter 11 bankruptcy protection, citing “questions about his leadership and the management of FTX’s complex variety of assets and enterprises under his command.”