Bankrupt cryptocurrency exchange FTX owes its top 50 creditors close to $3.1 billion and is reportedly considering either a sale or reorganization.
Meanwhile, FTX’s new CEO — who recently said he’d never seen a company so poorly run — painted a slightly rosier picture of the exchange’s subsidiaries after beginning a strategic review of the firm’s assets, the Financial Times reported Saturday (Nov. 19).
“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 John J. Ray III, who became the company’s chief executive following its bankruptcy filing on Nov. 11.
The company is due in bankruptcy court Tuesday (Nov. 22). A report Sunday (Nov. 20) by Reuters, citing court documents, said FTX owes $1.45 billion to its top 10 creditors.
This news is the latest chapter after two weeks of turmoil for FTX that began with a run on the firm’s assets, which triggered a liquidity crisis. At first, it seemed like rival crypto trading platform Binance might step in to rescue FTX with an acquisition.
However, Binance walked away from the deal days later in part because of reports that American regulators, including the Securities and Exchange Commission and the Commodity Futures Trading Commission, had begun looking into FTX.
There were also reports that former CEO Sam Bankman-Fried had used FTX customer funds to prop up sister firm Alameda Research. Since then, more reports have suggested that some of that money has apparently disappeared.
By the end of the week, FTX and 130 of its affiliated companies had filed for Chapter 11 bankruptcy. Further revelations about the company’s leadership followed, such as reports last week that Bankman-Fried sold a $300 million stake in the company in 2021.