FTX Bankruptcy Hearing
Bankrupt cryptocurrency exchange FTX is missing a substantial amount of assets, according to its lawyers who appeared yesterday in federal court for the firm's Chapter 11 (see 101) proceedings. FTX and its affiliates have about $1.24B in cash balances but owe $3.1B to its largest 50 creditors, court filings show. It is unclear how FTX will raise the cash it needs to repay creditors. FTX, once valued at $32B, filed for bankruptcy this month after a tumultuous week following a report that it had lent and lost billions in customer deposits to its sister investor trading firm, Alameda Research. FTX invested in mostly cryptocurrency and technology ventures, but almost $300M had also been invested in real estate in the Bahamas, lawyers said. Both firms were owned by 30-year-old Sam Bankman-Fried, who resigned as CEO and was accused of corporate negligence and mismanagement by John Ray, the group's new head. Ray is set to appear before Congress next month. See a timeline of the FTX collapse here.