FTX says it could have over 1 million creditors in new bankruptcy filing

Published

3 years ago

November 15, 2022

admin

FTX logo with crypto coins with 100 Dollar bill are displayed for illustration. FTX has filed for bankruptcy in the US, seeking court protection as it looks for a way to return money to users.

Jonathan Raa | Nurphoto | Getty Images

Beleaguered cryptocurrency exchange FTX may have more than 1 million creditors, according to a new bankruptcy filing, hinting at the huge impact of its collapse on crypto traders.

Last week, when it filed for Chapter 11 bankruptcy protection, FTX indicated 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.

Five new independent directors have been appointed at each of FTX’s main parent companies, according to the filing, including the former Delaware district judge, Joseph J. Farnan, who will serve as lead independent director.

Over the past 72 hours, FTX has been in contact with “dozens” of regulators in the U.S. and overseas, 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.

Before its collapse, FTX offered amateur and professional traders spot crypto investing as well as more complex derivatives trades. At its peak, the platform was valued by investors at $32 billion and had more than 1 million users. The company’s failure has had a chilling effect on the industry, with investors selling their positions and moving funds off exchanges.

On Monday, the CEOs of Binance and Crypto.com sought to reassure investors about their businesses’ financial health. Binance’s Changpeng Zhao said his exchange had only seen a minor increase in withdrawals, while Crypto.com chief Kris Marszalek said his firm had a “tremendously strong balance sheet.”

Commingling of client funds

FTX entered bankruptcy Friday as concerns over its financial health led to a surge in withdrawals and a plunge in the value of its native FTT token. Sam Bankman-Fried, FTX’s founder, stepped aside as CEO and was replaced by John J. Ray III.

FTX initially turned to Binance for a rescue deal, but this fell apart when Binance backed out citing reports of mishandled customer funds and alleged U.S. government probes into FTX. Over the weekend, FTX was hit with an apparent cyberattack resulting in the theft of more than $400 million worth of tokens.

FTX collapse has caused 'colossal loss of investor confidence,' says crypto broker exec

“FTX faced a severe liquidity crisis that necessitated the filing of these cases on an emergency basis last Friday,” lawyers wrote in the filing Tuesday. “Questions arose about Mr. Bankman-Fried’s leadership and the handling of FTX’s complex array of assets and businesses under his direction.”

CNBC reported Sunday that Alameda Research, FTX’s sister company, had borrowed billions in customer funds from the exchange to ensure it had enough liquidity on hand to process withdrawals.

In general, mixing customer funds with counterparties and trading them without explicit consent is illegal, according to U.S. securities law. It also violates FTX’s terms of service.

Bankman-Fried declined to comment on allegations but said the company’s recent bankruptcy filing was the result of issues with a leveraged trading position.

“I think it’s increasingly clear, even at a basic level, that this kind of intermingling of interests between the market maker and the exchange is highly unethical,” Jamie Burke CEO and founder of Web3-focused venture capital firm Outlier Ventures, told CNBC.

In a cryptic Twitter thread this week, Bankman-Fried wrote the word “What” followed by the letters “H,” “A,” “P,” “P,” “E,” “N,” “E,” “D,” in intermittent tweets.

He finished the thread Tuesday with the sentence: “10) [NOT LEGAL ADVICE. NOT FINANCIAL ADVICE. THIS IS ALL AS I REMEMBER IT, BUT MY MEMORY MIGHT BE FAULTY IN PARTS.]”

Technology

We’re increasing our Cisco Systems price target after an AI-fueled beat and raise

Published

4 hours ago

November 13, 2025

admin

We're increasing our Cisco Systems price target after an AI-fueled beat and raise

Technology

CNBC Daily Open: An AI and ‘everything else’ market in play in the U.S.

Published

4 hours ago

November 13, 2025

admin

CNBC Daily Open: An AI and 'everything else' market in play in the U.S.

Traders work on the floor of the New York Stock Exchange (NYSE) on Nov. 12, 2025 in New York City.

Spencer Platt | Getty Images

The divergence between the performance of the Dow Jones Industrial Average and Nasdaq Composite on Wednesday stateside reinforces the suggestion that there are two markets operating in the U.S.: one of an artificial intelligence and another of “everything else.”

Not only did the Dow rise, it also secured its second consecutive record high and closed above the 48,000 level for the first time.

The index, which comprises 30 blue-chip companies, is typically seen as a marker of the “old economy.” That is to say, it is mostly made up of large, well-established companies driving the U.S. economy, such as banks, healthcare and industrials, before Silicon Valley became a mini sun powering everything.

And it was those stocks — Goldman Sachs, Eli Lilly and Caterpillar — that lifted the Dow on Wednesday.

To be sure, new and flashy names, such as Nvidia and Salesforce, constitute the Dow too. But as the index is price-weighted, meaning that companies with higher share prices influence the Dow more, tech companies don’t exert as much gravity on it.

That’s in contrast to the Nasdaq, which is weighted by companies’ market capitalization, and dominated mainly by technology firms. The tech-heavy index fell as shares like Oracle and Palantir slipped — even Advanced Micro Devices’ 9% pop on its growth prospects couldn’t rescue the Nasdaq from the red.

It’s not necessarily a warning sign about overexuberance in AI.

“There’s nothing wrong, in our view, of kind of trimming back, taking some gains and re-diversifying across other spots in the equity markets,” said Josh Chastant, portfolio manager of public investments at GuideStone Fund.

But what investors would really like is if fork in the road merges into one. That tends to be the safer path to take.

What you need to know today

The Dow Jones Industrial Average notches record. The 30-stock index climbed 0.68% Wednesday stateside to close above 48,000 for the first time. The S&P 500 was mostly flat and the Nasdaq Composite fell 0.26%. The pan-European Stoxx 600 gained 0.71%.

Anthropic to spend $50 billion on U.S. AI infrastructure. Custom data centers will be first built in Texas and New York and go live in 2026, with more locations to follow. The facilities will be developed with Fluidstack, an AI cloud platform.

U.S. October jobs and inflation data might not be released. White House press secretary Karoline Leavitt told reporters that part of the fallout of the government closure could be lasting damage to the government’s data collection ability. But analysts think otherwise.

U.S. House of Representatives heading toward a vote. The House on Wednesday night stateside cleared a procedural hurdle required before the vote could begin on a bill that would end the government shutdown. Voting is expected to happen as of publication time.

[PRO] This U.S. mining stock is a top play: CIO. U.K. fund Blue Whale Capital’s Stephen Yiu said macroeconomic concerns, such as the U.S. fiscal deficit and the weakness of the dollar, could support the stock.

And finally…

People walk by the New York Stock Exchange (NYSE) on June 18, 2024 in New York City.

Spencer Platt | Getty Images

Why private equity is stuck with ‘zombie companies’ it can’t sell

Private equity firms are facing a new reality: a growing crop of companies that can neither thrive nor die, lingering in portfolios like the undead.

These so-called “zombie companies” refer to businesses that aren’t growing, barely generate enough cash to service debt and are unable to attract buyers even at a discount. They are usually trapped on a fund’s balance sheet beyond its expected holding period.

— Lee Ying Shan

Technology

Firefly Aerospace shares jump 15% on strong revenues, boosted guidance

Published

7 hours ago

November 12, 2025

admin

Firefly Aerospace shares jump 15% on strong revenues, boosted guidance

Jason Kim, chief executive officer of Firefly Aerospace, center, during the company’s initial public offering at the Nasdaq MarketSite in New York, US, on Thursday, Aug. 7, 2025.

Michael Nagle | Bloomberg | Getty Images

Firefly Aerospace‘s stock surged 15% on Wednesday after the space technology company issued better-than-expected third-quarter results and lifted its guidance.

Revenues in the third quarter jumped nearly 38% to $30.8 million from $22.4 million in the year-ago period and nearly doubled from the previous quarter.

Firefly’s net loss totaled $140.4 million, or $1.50 per share. The company said net loss included costs tied to its IPO, foreign exchange and executive severance

The company also lifted its outlook for the year, saying it now expects revenues to range between $150 million and $158 million. That’s up from previous guidance in the range of $133 million and $145 million.

This is Firefly’s second quarterly report as a public company. Last quarter, shares slumped after it posted a bigger loss and lower revenues than analysts were expecting.

The Cedar Park, Texas, company went public on the Nasdaq in August during a period of heightened enthusiasm toward space technology. The U.S. government and NASA have leaned on more contracts with companies like Firefly and Elon Musk‘s SpaceX to support moon missions.

But shares of Firefly have lost 70% of their value since their opening day close, and the company’s market capitalization has plummeted from about $8.5 billion to about $2.7 billion on Wednesday.

In September, Firefly shares sank after a rocket exploded during a ground test at the company’s Texas facility, days after receiving clearance from the Federal Aviation Administration over a separate incident. Firefly has since put “corrective measures” in place, the company said on Wednesday. Shares dropped 35% in September and are down 24% this month.

Firefly in July won a nearly $177 million contract with NASA for an upcoming moon mission, and in October, it announced its acquisition of defense tech firm SciTec to boost its national security portfolio.