There are indications that FTX, which filed for Chapter 11 bankruptcy a few days ago after its founder and former Chief Executive Officer (CEO) Sam Bankman-Fried resigned, may have more than one million creditors.
According to the newly released bankruptcy document filed to the federal court database system PACER, “As set forth in the Debtors’ petitions, there are over one hundred thousand creditors in these Chapter 11 cases. In fact, there could be more than one million creditors.”
This goes further to attenuate the complexity of the FTX insolvency and how difficult it would be to provide a solution. Equally, FTX has filed a motion to jointly administer the bankruptcy filing for all concerned parties as a single entity instead of treating each one as an individual case.
So far, over a hundred dockets have been filed by the troubled exchange including that of Alameda Research, Clifton Bay Investments, and West Realm Shires, a business entity in the U.S. that operates as FTX in some jurisdictions.
Stated in the filing, “The debtors submit that cause exists to modify that requirement such that the debtors will file a consolidated list of their top 50 creditors,” instead of creating a list of the top 20 creditors for each individual company especially, as it has more than one million creditors.
FTX Alert Regulators on Hack
Also, FTX operators have asked that creditors receive bankruptcy notifications via their email rather than at their physical residence. Of course, the customer’s email addresses are already on the FTX database because that has always been the means of communication for them. Furthermore, the filing talked about the unauthorized transactions which were performed on the platform last Friday.
The hack wiped out hundreds of millions from FTX wallets and since then the bankrupt exchange has been in touch with regulators globally including the United States Securities and Exchange Commission (SEC) and the Commodity Future Trading Commission (CFTC).
Presently, FTX has appointed five independent directors including former District Judge Joseph Farnan at FTX Trading; Matthew Doheny at FTX Trading; Mitchell Sonkin at West Realm Shires Inc.; Matthew Rosenberg at Alameda Research, and Rishi Jain at Clifton Bay Investments. All these individuals will see to the bankruptcy proceedings.