Market Analysis Report (15 Nov 2022)

Documents filed with the federal court database system PACER revealed FTX may have over 1 million creditors. Its new CEO, veteran insolvency overseer John J. Ray III, is working with legal, cybersecurity and forensic advisers on the company’s myriad of subsidiaries and their respective bankruptcy processes.

The firm filed over 100 dockets for its various affiliated companies, including the crypto hedge fund Alameda Research. As part of these dockets, FTX filed motions to jointly administer all of the entities rather than treat each one individually.

FTX also asked if, rather than create a list of the top 20 creditors for each firm, it can create a top 50 list for the overall structure. The filing reads:

“As set forth in the Debtors’ petitions, there are over one hundred thousand creditors in these Chapter 11 Cases. In fact, there could be more than one million creditors in these Chapter 11 Cases. As such, the Debtors submit that cause exists to modify that requirement such that the Debtors will file a consolidated list of their top 50 creditors.”

The platform’s operators are also asking the court to allow it to email the notice of bankruptcy to FTX’s creditors, rather than serving them with notices at their homes.

Meanwhile, U.S. federal authorities have ordered cryptocurrency issuer Paxos to freeze $19 million worth of crypto tied to the exchange.