Numerous creditors, in addition to the more than 200 associated entities FTX cited in the bankruptcy filing last week, are expected to cease operations.
It is now estimated that there may be up to 1 million creditors on the now-bankrupt FTX Derivatives Exchange. This new amount, which was revealed in a fresh court file released on Monday, has further complicated the bankruptcy processes, which many have previously predicted will be extremely difficult to sort through.
The company stated in its bankruptcy filing last Friday that the range of its liabilities was between $10 billion and $50 billion, while also pointing out that the same was true of its assets. Prior to increasing the number in this most recent filing, the company stated that it had approximately 100,000 creditors at the time.
The number of creditors in this chapter 11 is over a hundred thousand, and there may be as many as one million, according to court reports and filings posted to the federal court database system on Monday.
The demise of FTX is best categorized as one of the saddest wonders in the current ecology of digital currencies. When Sam Bankman-Fried, the company’s founder and former CEO, made a few mistakes, it became one of the most valuable digital currency companies. However, this led to a liquidity crisis that was marked by large withdrawals from the platform.
The cryptocurrency ecosystem has indeed been jolted by FTX’s collapse, and several people will undoubtedly begin to recognize the pressure and implications in the coming months. Most creditors have been anticipated to go out of business, in addition to the more than 200 affiliated companies it mentioned in the bankrupt petition last week.
The collapse of FTX, which seems to have cash tied to the company, might be the straw that shattered the camel’s back, according to Travis Kling, the founder of Ikigai Fund, an asset consulting firm in the cryptocurrency market, who made his comments on Twitter.
“Unfortunately, I must break some really awful news. Ikigai was affected by the FTX bankruptcy last week. Most of the investments of the hedge fund were held by us on FTX. We had received such little money, but by the time we tried to withdraw on Monday morning. In his post, he acknowledged, “We’re now trapped like all the others. The timing and possible restoration for FTX clients will become apparent over the next few weeks and months. It’s quite difficult to say at the moment. We’ll be in a better position to determine at a certain point whether Ikigai will continue or just enter the winddown phase.
More information will be made available in the upcoming weeks; the degree of the destruction still has to be determined. As of right now, according to analysts, the losses incurred could be comparable to those resulting from the failure of Terra (LUNA), Celsius Network, and Voyager Digital.
