The collapse of the FTX crypto exchange, which was valued at $32 billion at its peak, could end up affecting far more creditors than earlier estimated, according to a recent filing by the company.
Usually in such cases, debtors are required to provide a list with names and addresses of their top 20 unsecured creditors. But given the large scale of FTX debts, the firm intends to provide a list of the top 50 creditors by Friday.
As concerns about FTX’s balance sheet grew, depositors began to withdraw funds en masse, causing the FTT token to plunge in value. FTX had approached crypto exchange Binance for a deal.
But the deal never materialized as Binance was concerned about possible mishandling of customer funds at FTX as well as investigations by the U.S. government.
Crypto Fallout
Many entities are expected to be severely affected by the FTX collapse. Travis Kling, head of crypto hedge fund Ikigai, revealed to the UK Treasury Select Committee that they maintained a “large majority” of the hedge fund’s assets on FTX, according to The Guardian. By the time the firm began withdrawing money on Monday, they could not secure much.According to Tim Grant, head of Europe, the Middle East, and Africa at the crypto investors Galaxy Digital, they have lost $77 million due to the crisis.
“Primarily, the users were institutional. And also the equity investors were among the most sophisticated and largest investors in the world,” he said. “So there were a lot of very experienced eyes on this, and what it tells us is that this was a bad actor who was doing things behind very closed doors that we had no view into as a broader group.”
The Ontario Teachers’ Pension Plan (OTPP) had invested $95 million into FTX. Investment firm Temasek, owned by the Singapore government, had bet $205 million on the company.