FTX Crypto Exchange Owes $1.45 Billion To 10 Largest Creditors

FTX Crypto Exchange Owes $1.45 Billion To 10 Largest Creditors

According to a US court filing, FTX crypto exchange owes around $3.1 billion to its top 50 largest creditors in the company that incurred an unprecedented collapse recently. Not just that, the company which is already pushed into legal proceedings, has said that it owes about $1.45 billion to its top 10 creditors in the company founded by its former CEO Sam Bankman-Fried in 2019. FTX’s failure and collapse have left everyone worried in the cryptocurrency industry which was already facing a lot of challenges. The firm’s bankruptcy filings have also revealed that it owes huge sums of money to over 1 million people and investors.

As of now, there is no clarity on who will get what amount of funds back from the FTX after the conclusion of bankruptcy proceedings which are currently underway. Several experts have warned that investors should not expect much out of it as only a small fraction of money could be returned to them.

Amid all of this, a Wall Street Journal report said that Bankman-Fried personally received $300 million in a big funding round that was held in October 2021. He cashed in such a huge amount of money from the $420 million raised in one of the funding rounds.

ALSO READ: FTX’s Former CEO Sam Bankman-Fried Received $300 Million In A Funding Round: Report

The same report stated that the arrangement was kept undisclosed. Bankman-Fried had informed the investors that the amount would be used to reimburse him for the money he had spent on the purchase of Binance’s stake in FTX Group earlier. Though, the report said, it remains unclear what was done with that money. 

As per the report, what Bankman-Fried did with the amount of $300 million could not be verified.

‘I told you so’

Meanwhile, personal finance guru Dave Ramsey has once again taken a dig at the crypto market in a Dave Ramsey Show episode. In the wake of FTX’s collapse, he simply said, “I told you so.” He is known to advise people and investors to refrain from investing their money in cryptocurrencies. Ramsey calls himself “America’s trusted voice on money.” He has written seven-best selling books, selling over 11 million copies so far.

In December 2020, he described Bitcoin as “funny money.” Known as a longtime crypto sceptic, he describes crypto as a part of a portfolio “for entertainment.”  In the past, he has been at the receiving end of a lot of criticism from crypto fans around the world. 

Commenting on the ongoing imbroglio of FTX failure and the subsequent criminal probe that the firm is facing in the Bahamas, he said, ” If you can get the Bahamians upset enough about you that they go after you — because they’re a pretty laid-back bunch — I am just saying you get them pissed off you have really stepped in it.” He even said, “It’s straight-up thievery.”

Responding to his critics, he asked them, “Where is your money now? Mr. Fried took it.” According to him, this may be the biggest fraud and theft in human history. Ramsey is one of those who have been calling for a proper and tighter regulation of the crypto market. And this has only grown after the collapse of FTX.

ALSO READ: FTX’s New CEO John Ray III Calls Meltdown ‘A Complete Failure Of Corporate Controls’

At present, the crypto market is facing a number of challenges that has been aggravated further by the FTX failure. As per the court filing in a US court, the current CEO of the firm, John Ray III, said that the crypto exchange firm was mismanaged. He described that it was a “complete failure of corporate controls.”

The court filing went on to reveal that the company never had any board meetings, nor did it maintain any balance sheet. He said, “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.”

Disclaimer: Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Cryptocurrency is not a legal tender and is subject to market risks. Readers are advised to seek expert advice and read offer document(s) along with related important literature on the subject carefully before making any kind of investment whatsoever. Cryptocurrency market predictions are speculative and any investment made shall be at the sole cost and risk of the readers.

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