The FTX crisis has reached a new level of difficulty. The business owes its unsecured creditors more than $3 billion, according to court documents. Moreover, a pair of customers are claiming to have $200 million each in their dues.
Due to a lack of liquidity, FTX recently announced that it would be unable to process withdrawals. The issue was never resolved, and if anything, it became more complicated as other cryptocurrency platforms began to distance themselves from FTX. Some were heard saying that their interest was either minimal or zero in the operations of FTX.
A Letter of Intent was signed with Binance. It was nonbinding, allowing Binance to withdraw after performing due diligence. Indeed, there was something suspicious about the situation.
The recent filings by FTX have revealed that not just unsecured creditors but a pair of customers are also on the list with huge amounts in their names. According to the filings, the highest debt to a single creditor amounts to $226 million. Ten creditors on the list have individually claimed over $100 million. The information was submitted by FTX as part of its insolvency proceedings.
Needless to say, this has affected the entire crypto market, with users showing less interest in depositing their funds any further. Following the FTX crisis, there is concern that any other platform will declare a liquidity crisis and lock its funds for an indefinite period of time. FTX was unable to meet the withdrawal demands, causing panic on every other crypto platform.
Bitcoin has dropped significantly from its all-time high. FTX worsens this concern by contributing to a further decline in its 1-week value. BTC was last observed trading at $15,990.89, a 3.6% decrease. Likewise, Ether fell to $1,120.61, a 7% decrease, and was listed on the market.
Overall, the crypto market has lost a total of $260 billion. Binance’s willingness to liquidate FTT tokens through the acquisition of the company’s non-U.S. operations was formerly viewed as a way out of the enterprise.
FTX is presently attempting to restructure its empire; however, gaining everyone’s trust will be tough unless crypto ventures band together to support the revisions. There is little clarity regarding the end of the FTX crisis. Luno’s Vice President of Corporate Development & International, Vijay Ayyar, told the media that the market is in a wait-and-see mode to determine if any other entities are in danger of collapsing.
Creditors and investors have turned out to be the biggest victims of the crisis, with millions stuck in the now-bankrupt network.
In addition to this, there are reports claiming that a hack attempt has stolen $477 million in crypto assets. FTX has confirmed the same, putting other cryptocurrency ventures on high alert as the hacker searches for a way to cash out the stolen funds.