in ,

FTX Could Have More Than a Million Creditors, according to a new Filing

If this is accurate, Ahluwalia claimed that FTX’s fraud is “really enormous” and that the CEO of Enron was imprisoned for “lesser transgressions than this.”

The CEO of the insolvent cryptocurrency exchange FTX, Sam Bankman-Fried, is presently regarded as one of the most despised individuals in the world. Having been lauded as the savior of failed ventures, his potential personal motives are now being examined.

Investor confidence has been significantly damaged due to concerns about FTX contagion. The market is incredibly frightened, but industry analysts are still pushing for Bitcoin.

One of them is Nayib Bukele, the president of El Salvador, who claimed that the purpose of Bitcoin was to stop con artists from defrauding people, such as Sam Bankman-Fried’s “bailouts and wealth reassignments.”

In addition, there have been reports that the exchange may have over a million creditors.

A million or more Debtors

When the exchange requested Chapter 11 bankruptcy protection last week, it disclosed that it might have more than 100,000 creditors. According to a recent filing, the number may now exceed a million. Lawyers from the company said:

“In fact, there acould be more than one million creditors in these Chapter 11 Cases.”

This suggests that its collapse, which appears to be the worst blow to the sector, had a significant impact on both traders and normal retail consumers of cryptocurrencies.

The Antithesis of Bitcoin is FTX.

In a recent tweet, the president of El Salvador criticized the platform’s previous CEO and claimed that FTX is the antithesis of Bitcoin. The “effective altruism” movement promoted by Bankman-Fried is currently the topic of discussion. The bailouts for Voyager and BlockFi now seem to be “really Machiavellian,” according to Ram Ahluwalia, CEO and co-founder of an analytical agency, in light of claims that his company is insolvent.

Ahluwalia’s theory states that FTX misrepresented themselves as the “white knight” when they were actually the “delinquents.” He explained that in order to “buy time and slow down a margin call,” the exchange was acquiring its creditors. It was already known that FTX owed Voyager “hundreds of millions” in loans. Added he;

“When you can’t pay off your debt, the debtors wipe out your equity and own your company. FTX, in a truly Lex Luthor way, sought to buy Voyager to prevent this. The new parent assumes the subsidiary liability. Also, FTX could acquire with their inflated but actually worthless $32 Bn equity.”

The analyst also said that FTX and Alameda, its sibling trading company, both have weaknesses in their balance sheets. The two businesses had loans they had to repay in terms of obligations. On the asset side, their retained earnings were eliminated due to operating losses because their net present value was negative. Ahluwalia asserted that the acquisition of BlockFi and Voyager temporarily resolved both issues.

“It requires the ‘target’ to have credibility in the acquirer and also requires reverse due diligence (since the form of payment is FTX equity).”

FTX: bigger or the next Enron?

Investors in cryptocurrencies are enraged by FTX’s abrupt drop. Many have demanded that SBF be sentenced to jail time in response to reports that he used exchange user funds to cover losses in his faltering crypto enterprise. The US Department of Justice is currently looking into whether SBF was only incompetent or whether he purposefully misled users.

However, if Ahluwalia’s theory proves to be accurate, the scale of the fraud would be bigger than that of the discredited energy giant Enron, which engaged in dubious off-the-books business and accounting methods in the early 2000s.

As was previously reported, FTX is currently under investigation for possible malfeasance by the Bahamas securities regulator and financial investigators. Also canceled by Visa, the world’s largest processor of payments, was its newly announced debit card initiative.

Written by Newsway

NewsWay reporters are Media employees of the newsway.com.ng vested with the responsibilities of getting informative data from verifiable sources and publishing same undistorted on behalf of the NEWS WAY INFO-TECH which is a parent company that birthed the NewsWay blog.

Leave a Reply

Your email address will not be published. Required fields are marked *

GIPHY App Key not set. Please check settings

    Pi Network may delay launch of open Mainnet as crypto sector layoffs continue to rise

    JUST IN: Apple unveiled emergency SOS via satellite to users of the iPhone 14