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Wednesday, December 7, 2022

FTX Owes 50 Creditors a Whopping $3.1 Billion, Proving Bad Management at the Exchange

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The once prominent crypto exchange FTX which is based in the Bahamas, owes 50 creditors $3.1 billion according to court documents filed Saturday in its bankruptcy proceedings.

The court ordered FTX to name its largest creditors. Reports are that the largest amount owed to a creditor is $226,280,579, while the second largest creditor is owed $203,292,504.

Why it matters

This whopping figure is another surprising revelation as more information about the management of the company unravels. It proves what new CEO John Ray told the court in earlier documents that FTX was managed poorly.

“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 here,” he said.

“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.”

The big picture

FTX is known as the second biggest exchange and was once valued at $32 billion, but filed for bankruptcy last week. A colossal hole was found in his balance sheet. He was allegedly removing customers’ money from FTX to fund his trading company Alameda’s Research, which is illegal in the financial market. Now, he owes billions to customers.

Bankman-Fried stepped down as CEO following the controversy.

 

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