Insolvent crypto exchange: FTX owes top creditors billions

Insolvent crypto exchange
FTX owes billions to top creditors

A few days ago, FTX is still one of the largest crypto exchanges in the world. Then the company collapses and destroys assets worth billions. FTX provides information about the amount in court documents.

According to its own statements, the insolvent crypto exchange FTX owes its top 50 creditors almost $3.1 billion. The top 10 lenders alone would account for about $1.45 billion, according to US court documents released over the weekend.

FTX and its affiliates filed for bankruptcy in Delaware on Nov. 11 after customers dumped en masse in response to the covert movement of $10 billion in deposits. About a million customers are said to be affected by the spectacular bankruptcy.

The crypto exchange stated that it has initiated a strategic review of its global assets and is now preparing to sell or restructure some businesses. According to court documents, a class action lawsuit has been filed against Sam Bankman-Fried in Miami. The interest-bearing cryptocurrency accounts offered by FTX should not have been offered in the United States due to a lack of a license, the lawsuit said.

In addition to Bankman-Fried, the plaintiffs are also seeking damages from football superstar Tom Brady and tennis player Naomi Osaka. The two would have supported FTX as advertising characters. The FTX bankruptcy also gets politicians on the scene. The US House of Representatives is planning a hearing on the issue. In addition to Bankman-Fried, representatives of competitors such as Binance should also be heard.

Alarm bells are also ringing in Europe. According to ECB Council member Pablo Hernandez de Cos, the collapse of the crypto exchange FTX shows the dangers associated with such cryptocurrencies. “We hope that the recent events will raise citizens’ awareness of the risks associated with these crypto assets,” said the European Central Bank (ECB) Governing Council member.

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