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A list of the top 50 creditors of the FTX group of companies has been filed with the bankruptcy court, and the sum total amounts to $3.1 billion.
The top two creditors are owed $226 million and £203 million. None of the names of the creditors are included in the list, in line with a request by FTX to shield its clients’ identity for reasons of business competitiveness.
The 50th largest creditor is owed $21.3 million.
Today’s filing uncovers the first concrete details relating to the shape of FTX companies’ liabilities, which are thought to amount to around $10 billion.
Crypto prices faltering after latest FTX news
Bitcoin and other crypto prices have weakened since the news emerged, with total crypto market cap down 1.93% to $821 billion.
Bitcoin has slipped 1.2% in the past 24 hours, trading at $16.497, Ethereum is down 3% at $1,166 and Dogecoin off 6% at $0.079.
However, the poor record-keeping by FTX means that new CEO John Ray cannot be absolutely sure that the top 50 list is accurate.
Also, the delay in producing the list, which is a requirement of Chapter 11 bankruptcy proceedings, has been due to the parlous state of FTX companies’ records.
In the notice filed with the court it states; “…the Top 50 List is based on the Debtors’ currently available creditor information, including customer information that was able to be viewed but is not otherwise accessible at this time. The Debtors’ investigation continues regarding amounts listed, including payments that may have been made but are not yet reflected on the Debtors’ books and records. The Debtors are also working to obtain full access to customer data.”
Ray characterized governance at FTX as a "complete failure of corporate controls" and the worst he had ever seen in his career, which includes clearing up the mess after the infamous Enron collapse in 2007.
Top 10 FTX creditors are owed $100 million
The consolidated list of creditors shows the largest unsecured claims, although can include secured creditors where the collateral is now inadequate, thus placing the creditor in the unsecured claims list.
The top 10 creditors alone are owed $100 million and are likely to include hedge funds and other financial companies that traded on the exchange, as well as crypto entities such as lenders.
FTX could have as many as one million creditors and arguments over debt seniority will determine which ones will be paid first.
It has become an area of contention in other crypto bankruptcies, such as Voyager Digital, whether or not a financial institutions with an account at a crypto exchange would be more senior debt than that of other unsecured creditors such as retail clients.
Crypto exchanges are constituted in markedly different ways to the division of labour that exists in traditional finance. Firms such as FTX are part bank, part broker-dealer and part exchange. That means they will acts as custodians and hold large amounts of capital on behalf of clients.
Ellison, Wang and Singh all sacked, CEO Ray is on $1,300 an hour
In other court documents, it has come to light that Caroline Ellison, Gary Wang and Nishad Singh have been sacked.
Also, total FTX employee headcount at the time of the petition declaring bankruptcy was 330 persons based in 29 countries, in addition to contractors. Of the directly employed staff, 140 work in the US.
Documents say that the “Debtors continue to review personnel issues and anticipate, based on the nature of the Debtors’ businesses, that a large number of Employees will need to continue to work for the Debtors for the foreseeable future.”
CEO John Ray is being paid $1,300 an hour for his services and a $200,000 retainer.
The first day’s sitting of the court will take place on Tuesday 22 November at 11am ET, with Judge John T Dorsey presiding.
Vitalik Buterin: "centralized anything is by default suspect"
In other news, Vitalik Buterin, co-founder of Ethereum, has described the FTX implosion as a "huge tragedy".
But he added, “That said, many in the Ethereum community also see the situation as a validation of things they believed in all along: centralized anything is by default suspect.”
For Buterin the affair is a vindication of the correctness of putting faith in "open transparent code above individual humans". He noted that DeFi protocols had worked "flawlessly".