- JP Morgan Chase, Wells Fargo, Bank of America and Silvergate Bank may have had stakes in the FTX exchange prior to its liquidity crunch.
- FTX contagion continues to spread as new bankruptcy filing revelations list banking giants and institutions exposed to the stock market.
- The price of the FTX exchange’s native FTT token stabilized at the $1.55 level after posting nearly 30% losses over the past week.
The FTX exchange’s bankruptcy filing in federal court shows that the platform has hired the Kroll Restructuring Administration as its damage and notification body. The filing shared details of institutions and organizations affected by FTX’s collapse, including celebrities and investors.
FTX exchange native token FTT is exchanging hands at $1.55 and started its recovery.
Also read: Because of this, cryptocurrency prices could continue to fall in the bloodbath caused by the FTX crash
FTX contagion spreads to US banking giants
The FTX exchange is navigating the federal bankruptcy proceedings as an agent with the help of the Kroll Restructuring Administration. Kroll is often used as a proxy for cases where creditors comprise more than 1,000 parties. Kroll also mediates and serves notices between legal entities in court proceedings.
Following its November 11 Chapter 11 bankruptcy filing in the US Bankruptcy Court for the District of Delaware, FTX Group announced that related documents are available for access. The documents include a preliminary list of claims that represent outstanding debts in the millions to Bankhaus Scheich Wertpapierspecialist, Blockchain Fund, Ethereal Tech, and organizations whose names remain “on file.”
List of FTX Debtors
The document exposed careless accounting practices, regular deletion of corporate communications, secret lending of corporate accounts, substandard key security, and other instances of mismanagement by FTX.
The document lists 102 debtors, including numerous companies associated with Samuel Bankman-Fried’s trading company Alameda Research. The extent of each company’s participation in the FTX exchange is yet to be known. Each person or organization on the list ranges from shareholders of 5% or more.
A sample of prospects include FTX employees Samuel Bankman-Fried, Nishad Singh and Zixiao Wang. The list of banking giants includes Bank of America, Circle, JP Morgan Chase Bank, Wells Fargo, Silvergate Bank and celebrities Kevin O’Leart, Stephen Curry and Tom Brady, among others.
FTX witnessed a corporate control failure
FTX CEO John J Ray III shed light on the lack of management controls and nefarious activities taking place on the now-bankrupt exchange platform. Ray noted several incidents of poor accounting, fraud and misconduct at FTX. In his opening speech, Ray was quoted as saying:
Never in my career have I seen such a complete failure of corporate controls and a complete lack of reliable financial information as here.
Following the FTX exchange’s bankruptcy announcement, Ray took over and Samuel Bankman-Fried resigned from his position as CEO. Ray is aware that he’s never seen a company in as bad shape as FTX.
In his 30-page document, Ray wrote:
From the compromised system integrity and flawed regulatory oversight abroad to the concentration of control in the hands of a very small group of inexperienced, inexperienced and potentially vulnerable individuals, this situation is unprecedented.
Indonesian regulators have ordered crypto exchanges to halt FTT token trading
Indonesia’s commodity futures trading regulator has ordered crypto exchanges to halt trading of FTX exchange token FTT.
Didid Noordiatmoko, acting head of Indonesia’s Commodity Futures Trading Regulatory Agency, told Antara news agency that after a massive pullback of the FTX exchange’s token, the FTT price continued to fall dramatically. The FTX exchange token FTT is among the 383 crypto assets mentioned in the regulation issued by the regulator in 2022.
The regulator is responsible for closely monitoring the exchanges that facilitate FTT token trading. Indonesian regulators have urged cryptocurrency exchanges to monitor and analyze developments involving the FTX exchange’s token FTT.
Between January and October 2022, FTT accounted for less than 0.04% of the total crypto trading volume in Indonesia. However, amid the current situation, the regulator intends to review the full list of registered crypto assets traded in Indonesia.
FTT price is holding above the $1.55 level
The FTX exchange’s native token FTT has seen nearly 30% losses over the past week. The FTX exchange crash and bankruptcy pushed the FTT price from $22 to $2 in less than 48 hours. The exchange’s native token has been holding above the $1.55 level for almost 24 hours.
Despite the FTX exchange token being delisted from Indonesian exchanges, FTT exchanged hands at $1.55.