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    FTX crypto scandal: exchange owes $3.1bn to creditors, as bankruptcy hearing set for Tuesday

    By Daniela Ešnerová

    10:32, 21 November 2022

    Broken FTX logo
    FTX owes its biggest creditor over $260m – Photo: Shutterstock

    Collapsed cryptocurrency trading platform FTX owes a whopping $3.1bn (£2.6bn, €3.6bn) to its 50 largest creditors, documents filed to a Delaware bankruptcy court show. 

    The list of creditors – whose names have been redacted – reveals that the top 10 featured parties have claims between $100m and $260m, totalling more than $1.4bn.

    The document lists FTX’s 50 biggest claimants, but the defunct company has more than a million creditors in total, a separate court filing shows.

    FTX also filed motions with the bankruptcy court for an interim relief that would allow it to pay its main creditors.

    FTX token (FTT) to US dollar

    The list of FTX 50 largest creditors, published on Saturday, includes claims that the debtor disputes. It doesn't include claims by any person or entity who is an insider.

    Bankruptcy court hearing

    FTX – which was the world’s second-largest cryptocurrency platform at just the begining of month – filed for Chapter 11 bankruptcy protection in the US on 11 November, 2022 after a tumulous week when the company wasn’t able to satisfy its clients’ withdrawals requests.

    ETH/USD

    3,135.90 Price
    -1.110% 1D Chg, %
    Long position overnight fee -0.0616%
    Short position overnight fee 0.0137%
    Overnight fee time 21:00 (UTC)
    Spread 6.00

    US100

    17,641.80 Price
    -0.230% 1D Chg, %
    Long position overnight fee -0.0262%
    Short position overnight fee 0.0040%
    Overnight fee time 21:00 (UTC)
    Spread 1.8

    Gold

    2,336.05 Price
    +0.130% 1D Chg, %
    Long position overnight fee -0.0191%
    Short position overnight fee 0.0109%
    Overnight fee time 21:00 (UTC)
    Spread 0.40

    XRP/USD

    0.53 Price
    -0.270% 1D Chg, %
    Long position overnight fee -0.0753%
    Short position overnight fee 0.0069%
    Overnight fee time 21:00 (UTC)
    Spread 0.01168

    At the time, Sam Bankman-Fried, founder of both FTX and Alameda and former FTX’s CEO, resigned from his role. He was replaced by John Ray, a bankruptcy lawyer famous for overseeing the recovery of assets from energy firm Enron, which went bust in 2001.

    Ray has assumed the role of FTX’s CEO and chief restructuring officer. As part of the bankruptcy process, FTX launched a strategic review of its global assets to “begin to maximise recoverable value for stakeholders”.

    “The FTX debtors have filed today various motions with the Bankruptcy Court seeking interim relief from the court that, if granted, would allow the operation of a new global cash management system and the ordinary course payment of critical vendors and vendors at foreign subsidiaries,” the bankrupt company said in a statement on Friday.

    The hearing was scheduled for Tuesday, 22 November, 2022.  

     

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    What did Bankman-Fried, FTX and Alameda do wrong?

    FTX market
    The difference between trading assets and CFDs
    The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
    You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
    CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
    CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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