FTX Owes Money To More Than a Million People, Court Filing Suggests

The embattled and now bankrupt cryptocurrency exchange FTX may owe more than a million people money, according to a Tuesday court filing (PDF). Motherboard reports: "The events that have befallen FTX over the past week are unprecedented. Barely more than a week ago, FTX, led by its co-founder Sam Bankman-Fried, was regarded as one of the most respected and innovative companies in the crypto industry," the filing notes. "FTX faced a severe liquidity crisis that necessitated the filing of these [bankruptcy] cases on an emergency basis last Friday. Questions arose about Mr. Bankman-Fried's leadership and the handling of FTX's complex array of assets and businesses under his direction." The filing goes on to state that, originally, it was thought that there were "over one hundred thousand creditors in these Chapter 11 Cases." It then states that, "in fact, there could be more than one million creditors," meaning that FTX could owe money to more than a million people, the vast majority of whom are customers and former customers. The filing is an attempt to consolidate and simplify the bankruptcy process; as noted in an earlier filing, FTX operated a highly complex corporate structure with dozens of companies, each of which filed for bankruptcy separately last week. The fate of customers' money is still up-in-the-air as FTX halted withdrawals last week. According to the Wall Street Journal, FTX founder Sam Bankman-Fried thinks he can raise enough money to make users whole. "Mr. Bankman-Fried, alongside a few remaining employees, spent the past weekend calling around in search of commitments from investors to plug a shortfall of up to $8 billion in the hopes of repaying FTX's customers," WSJ reports. "The efforts to cover that shortfall have so far been unsuccessful."

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