Bankrupt cryptocurrency exchange FTX said its top 50 creditors are seeking $3 billion in claims.
The insolvent company released the amount of the claims of each of the top creditors, but did not name them or disclose any information about their headquarters, according to a Nov. 19 filing with the U.S. Bankruptcy Court for the District of Delaware.
The exchange founded by former billionaire Sam Bankman-Fried owes about $1.45 billion to its top 10 creditors.
The bankruptcy attorneys from Landis Rath & Cobb and Sullivan and Cromwell, said they included customer information that was “able to be viewed but is not otherwise accessible at this time.”
An investigation into the amounts listed, including “payments that may have been made but are not yet reflected on the Debtors’ books and records,” is being conducted, attorneys said in the filing.
“The Debtors are also working to obtain full access to customer data,” the filing said. “The Debtors will update the top 50 List, if appropriate, when additional information is available.”
FTX could have as many as one million investors who are seeking to recoup their losses. The Bahamian-based brokerage filed for bankruptcy after facing massive liquidity issues when its acquirer, Binance, backed out of a merger.
“In fact, there could be more than one million creditors in these Chapter 11 Cases,” according to the Nov. 15 filing.
None of the creditors was named, but the one with the largest claim is $226 million, followed by $203 million and $174 million. The fourth and fifth claims were for $159 million and $130 million.
Investors Facing Total Losses
Investors in FTX, which was a popular exchange for digital assets and was once valued at $32 billion, are likely facing total losses.
FTX was an exchange used by crypto investors that included retail and institutional traders such as several hedge funds. It was backed by numerous high profile venture capitalists raising $420 million such as SoftBank, Ontario Teachers’ Pension Plan, Sequoia Capital, Temasek, Sea Capital, IVP, ICONIQ Growth, Tiger Global, Ribbit Capital, Lightspeed Venture Partners, and funds and accounts managed by BlackRock.
Sequoia sent a letter to its limited partners on Nov. 9 stating that it now values the $210 million investment in FTX as $0 and that it was a total loss.
“Based on our current understanding, we are marking our investment down to $0,” the Silicon Valley-based firm said. “The fund remains in good shape,” it said in a statement posted on its Twitter account.
FTX Selling Businesses
The company said on Nov. 19 it plans to sell or reorganize some of its businesses, said John Ray, the chief restructuring officer and new CEO of FTX.
He is moving quickly to liquidate the group’s assets.
“The FTX debtors have engaged Perella Weinberg Partners LP as lead investment bank and commenced preparation of certain businesses for sale or reorganization,” Ray’s office said in a statement on Nov. 19.
“The engagement of PWP [Perella Weinberg Partners] is subject to Court approval.”
Ray, who served as the liquidator of insolvent energy brokerage Enron, also indicates that some FTX subsidiaries are solvent, which is good news for creditors of the brokerage who hope to be able to recover some of their money.
“Based on our review over the past week, we are pleased to learn that many regulated or licensed subsidiaries of FTX, within and outside of the United States, have solvent balance sheets, responsible management and valuable franchises,” said Ray in the statement.
“Some of these subsidiaries – such as LedgerX LLC and Embed Clearing LLC, for example – are not debtors in the chapter 11 cases. Other subsidiaries – such as FTX Japan KK, Quoine Pte. Ltd, FTX Turkey Teknoloji Ve Ticaret A.Ş., FTX EU Ltd, FTX Exchange FZE and Zubr Exchange Ltd – are debtors.”
A hearing on the company’s first-day motions is set for Nov. 22, which will be presided before a U.S. bankruptcy judge, according to another separate court filing.