FTX owes more than $3 billion to biggest creditors: court filing
Sam Bankman-Fried, founder and former CEO of FTX, testifies during a hearing before the House Financial Services Committee.
The collapsed cryptocurrency exchange FTX owes more than $3 billion to its 50 biggest creditors, according to new court filings.
The revelation was part of an FTX filing in the U.S. Bankruptcy Court in Delaware.
The vast sum includes more than $1 billion that FTX owes to its top 10 creditors. The company said it is still reviewing information and may have to update the list.
FTX, once a leading cryptocurrency company, lost billions of dollars on risky bets through an affiliated trading firm, Alameda Research, apparently using customer funds.
Former CEO Sam Bankman-Fried resigned as the head of the company and filed for bankruptcy earlier this month. The FTX founder’s net worth, once valued at $26 billion, has been almost entirely wiped out following the collapse.
FTX has appointed a new CEO, John Ray III, to clean up the company and mitigate damages during the bankruptcy process.
In a court filing last week, Ray said “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” at FTX.
“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” he wrote.
Ray said the company failed to manage cash properly and lacked proper book records to track investments.
Former investors who may have collectively lost billions of dollars are now suing FTX after the company’s collapse.
Lawmakers on Capitol Hill are holding a hearing on the company’s collapse next month and federal agencies are also investigating what happened.