Fresh data reveals a more detailed overview of FTX’s financial problems
According to the Nov. 20 court filing, FTX Trading LTD owes its top 50 creditors over $3 billion. Meanwhile, insolvency lawyers warn investors that it could take “decades” to get their funds back from the now-bankrupt crypto exchange.
Although the creditors’ identities are unknown to the general public, the recent filing indicated that FTX owes the top individual alone over $226 million. All other top-owed sums range between $21 million and $203 million. At the same time, not all customer information is accessible at this time, so the investigation continues.
While investors are eager to know when they will be able to receive their funds back, insolvency lawyer Stephen Earel said it will be an “enormous exercise” in the liquidation process to “realize” the crypto assets and work out on reimbursement, with the process potentially taking years, if not “decades.” The main complexities arise from cross-border insolvency issues and competing jurisdictions.
Simon Dixon, the founder of the global investment platform BnkToTheFuture, added that those who hold funds on FTX will become creditors. Although a creditors committee will be established to represent their interests, FTX users will be in the same queue with all other affected parties, including investors and venture capital funders.
Despite all the mess caused by another crypto-related bankruptcy, Ethereum co-founder Vitalik Buterin defended the blockchain and crypto industries, saying the collapse of FTX has illustrated once again that the problem lies in people, not technology. He added the fall of the beleaguered crypto exchange reaffirms the negative position of many in the Ethereum community concerning centralization. That includes trusting in open and transparent code above humans.