Collapsed cryptoexchange owes single creditor $226m

CRYPTOEXCHANGE FTX left its two biggest customers each more than $200m (£168m) out of pocket when it collapsed earlier this month, court papers have revealed.

Filings show FTX’S biggest unsecured creditor was owed $226m. The company’s 10 largest creditors, all customers, have claims in excess of $100m each. FTX’S 50 largest creditors are owed $3.1bn in aggregate – and all are owed $21m or more. Names and locations were redacted.

The figures shine a fresh light on FTX’S bankruptcy, which led to cofounder Sam Bankman-fried stepping down. He has been replaced as chief executive by John Ray III, best known for running the insolvency of scandal-hit energy company Enron in the early 2000s.

The task facing Mr Ray, who will be paid $1,300-an-hour is significant. FTX sank earlier this month with liabilities of at least $10bn. The failure could involve 1m creditors.

Staff were also paid in cryptocurrency, court filings revealed.

Bosses said on Saturday that a review of FTX’S global assets had been launched and they planned to either reorganise or sell the business to recoup money owed to creditors.

The insolvency will be brought before a US bankruptcy judge in the District of Delaware tomorrow.

Proceedings have been delayed after bankruptcy specialists struggled to locate reliable records at the company.

Mr Ray said he had never seen “such a complete failure of corporate controls and such a complete absence of trusty financial information”.

FTX, previously the world’s secondbiggest cryptoexchange, had clients from large financial investors such as hedge funds. Because cryptoexchanges often retain custody of their clients’ assets, customers were unable to withdraw their funds as the company began halting payments.

FTX, previously seen as one of the most reliable exchanges in its industry, has already left prominent crypto figures scratching for answers.

Vitalik Buterin, the co-founder of currency Ethereum said that lessons needed to be learned from the saga. “What happened at FTX was of course a huge tragedy,” he said. “That said, many in the Ethereum community also see the situation as a validation of things they believed in all along: centralised anything is by default suspect,” he said.

Meanwhile, FTX’S European arm tried unsuccessfully to buy a trading licence in Switzerland, it emerged over the weekend.

FTX Europe, based near Zurich, asked banking regulator Finma for a licence but was rebuffed in recent weeks.

The Swiss government has been pushing to develop a cryptofinance hub in and around the city of Zug, dubbed “Cryptovalley”.