FTX owes more than $3 billion to top 50 crypto creditors

Roughly 1 million customers unable to withdraw funds from cryptocurrency exchange

The FTX logo and mobile app adverts are displayed on screens on 10 November, 2022, in London, England (Getty Images)

Collapsed crypto exchange FTX owes more than $3 billion to just 50 creditors, according to court filings.

The cryptocurrency exchange, which filed for bankruptcy earlier this month after failing to recover from a liquidity crisis, also revealed that roughly $1.45 billion is owed to its top 10 creditors.

The company had an estimated 1 million customers when it froze withdrawals from its platform.

The implosion of FTX sent shockwaves through the entire market, wiping around $200 billion from the global crypto market.

Bitcoin is currently trading just above $16,000 – its lowest price in two years – as analysts warn of a “cascade” effect on other exchanges and custodians.

“The FTX insolvency is devastating for the entire cryptocurrency industry. Firstly, the shortfall of funds, reportedly north of $8 billion, is obviously crushing for customers who had been using FTX as their exchange of choice,” Dan Ashmore, a crypto analyst at CoinJournal, told The Independent.

“But beyond the money, this is also a substantial blow to the reputation of crypto. It is just the latest stunning collapse, following the events of the Terra debacle, which saw a $60 billion ecosystem go up in flames and drag several other projects with it – Celsius, Three Arrows Capital and Voyager Digital, to name a few.”

Leading crypto exchanges have attempted to reassure customers that their funds are safe, including Binance and Crypto.com.

Despite the concerns, some institutional investors have seen the latest downturn as an opportunity to stockpile the world’s most valuable cryptocurrency, with Pantera Capital announcing over the weekend that it will buy a further $140 million worth of bitcoin at current prices.

The downfall of FTX has once again brought close scrutiny to the crypto industry.

In a statement published during the recent G20 summit, the White House called for greater regulation and oversight for cryptocurrency firms.

“We welcome the FSB’s [Financial Stability Board] proposed approach for establishing a comprehensive international framework for the regulation of crypto-asset activities based on the principle of ‘same activity, same risk, same regulation’,” the statement read.

“We also welcome the FSB consultation report on promoting international consistency of regulatory and supervisory approaches to crypto-assets activities and markets.”