According to a new bankruptcy filing, troubled cryptocurrency exchange FTX may have more than 1 million creditors hinting at the huge impact of its collapse on crypto traders. Last week, when it filed for Chapter 11 bankruptcy protection, FTX showed that it had more than 100,000 creditors with claims in the case. But in an updated filing Tuesday, lawyers for the company said: “In fact, there could be more than one million creditors in these Chapter 11 Cases.” Typically in such cases, debtors are required to provide a list of the names and addresses of the top 20 unsecured creditors, the lawyers said. However, given the scale of its debts, the group instead intends to file a list of the 50 largest creditors on or before Friday. According to the filing, five new independent directors have been appointed at each of FTX’s main parent companies, including the former Delaware district judge, Joseph J. Farnan, who will serve as a lead independent director.
Over the past 72 hours, FTX has been in contact with “dozens” of U.S. and overseas regulators, the company’s lawyers wrote. These include the U.S. Attorney’s Office, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. This year has seen a spate of crypto firms, including Celsius and Voyager Digital, fail as they contend with a slump in digital asset prices and ensuing liquidity issues. In earlier bankruptcy cases, traders on these platforms have been designated “unsecured creditors,” meaning they’ll likely be at the back of a long queue of entities seeking repayment, from suppliers to employees.
