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The Almighty Buck

FTX Owes Nearly $3.1 Billion to Top 50 of Its 1M Creditors. Celebrity Endorsers Sued (abc13.com) 111

Posted by EditorDavid from the creditor-report dept.
ABC News reports: The cryptocurrency exchange FTX owes creditors $3.1 billion, according to court documents filed late Saturday night....

Creditors' names were not listed on the court filing, but the largest is owed $226,280,579, .

As part of its bankruptcy proceedings, FTX was required to list to the court its 50 largest creditors — either individuals or corporations — who are owed money. The second largest entity is owed $203,292,504, the court filing shows.
A video at the top of the article from ABC News adds that several celebrities "are being sued by a man who invested in the now-bankrupt crypto exchange... The lawyer behind the class claims that FTX was a massive ponzi scheme, only successful because it had a boost from celebrities."

Meanwhile CNN adds that FTX "owes about $1.45 billion to its top ten creditors, it said in a court filing on Saturday, without naming them."

The crypto exchange said on Saturday it has launched a strategic review of its global assets and is preparing for the sale or reorganization of some businesses. A hearing on FTX's so-called first-day motions is set for Tuesday morning before a US bankruptcy judge, according to a separate court filing....

There could be more than 1 million creditors in the US cases that are already filed, FTX Group said, adding that it has been in touch with "dozens" of US and international regulatory agencies including the US Attorney's Office, the US Securities and Exchange Commission and the Commodity Futures Trading Commission.

Meanwhile, authorities in the Bahamas — where FTX is based — are investigating whether any criminal misconduct occurred related to the company's implosion, the Royal Bahamas Police Force said in a statement last Sunday. The Bahamian authorities have also taken control of cryptocurrency assets held by FTX Digital Markets, The Bahamas-based FTX unit that filed for Chapter 15 bankruptcy protection Tuesday.
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FTX Owes Nearly $3.1 Billion to Top 50 of Its 1M Creditors. Celebrity Endorsers Sued More

FTX Owes Nearly $3.1 Billion to Top 50 of Its 1M Creditors. Celebrity Endorsers Sued

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  • All this proves (Score:4)

    by jmccue ( 834797 ) on Sunday November 20, 2022 @10:53PM (#63067275) Homepage

    All this proves, until the ultra-rich gets screwed, the government does not care who these ponzi schemes hurt. Now there are lots of investigates starting when it should have happened years ago.

  • Since Bitcoin is worthless please post your private keys here.
  • The whole thing about reviving this disaster ⦠after hearing the stories of the management in Hong Kong, Northern Cali, the Bahamas ⦠are you kidding me? Thereâ(TM)s probably 12 people who should be headed for prison, and this clown show should be shut down.

    • There's probably 12 people who should be headed for prison

      They greased the right palms, Martha Stewart will have seen more jail time than anyone in FTX when this is all over.

    • Re: (Score:2)

      by ceoyoyo ( 59147 )

      Are you sure? I have no idea what the banking laws are in Bermuda. I bet you don't either, nor do any of the people who thought FTX offering 15% interest was totally reasonable.

      The crypto types wanted unregulated, no borders, no nanny watching them, etc. Welcome to the future! To the moon! Well, something's going to the moon.

      • Bahamas haha. Lots of money parked there. One of the golden rules is never put all your eggs or investments in one basket. Try keeping a financial license if you don't. They second rule is know what you have lost (lessons for GFC) have not been learnt. Given the quantum and run on exchanges, things like these have got to be regulated, or treated as 'junk' no liability things, where the words investment, secure, safe, respected are not allowed to be used whatsoever. Mr Madoff would envy the opportunity if

      • Hopefully in a "Bang. Zoom. Straight to the moon!" style.

  • $226,280,579 (Score:3)

    by l810c ( 551591 ) on Sunday November 20, 2022 @11:29PM (#63067327)

    Haha.
    Have People not learned a Lesson?
    You Don't dump all of your savings into Anything.
    Too Good to be True?
    Yada Yada
    Unfortunately, it's the little guys that will suffer the most.

    • Re: $226,280,579 (Score:5, Interesting)

      by XMode ( 252740 ) on Monday November 21, 2022 @12:57AM (#63067453)

      What's more likely is that someone who has dumped $226M in to a crypto exchange hasn't dumped all of their life savings in to a crypto exchange. People with that amount of money don't usually put all their eggs in one basket and while its likely this would be noticed (I doubt anyone could not notice a loss of that size) its unlikely to bankrupt the person. The people most likely to be bankrupt by this collapse are the people not in the top 50.

      • Speaking of little guys - each time I visit Tesco and walk out with some buns and a chocolate, I notice some Ukrainian guys counting their pennies - they only ever buy bread and beer. These are the real little people that get hurt by the big criminals.
    • Comment removed based on user account deletion

    • Re: (Score:2)

      by znrt ( 2424692 )

      more likely 200m was the pocket change this rich person could afford to lose on a risky bet.

      tfa says one of them is suing celebrities who advertised the scam. that's probably more about hurt feelings than about concern for the lost money. having lots of money doesn't necessarily equate with being smart.

  • One can hope this will end the crypto craze (Score:5, Informative)

    by khchung ( 462899 ) on Sunday November 20, 2022 @11:36PM (#63067333) Journal

    Let's hope this fallout is big enough to kill off the crypto craze completely. That's would have done humanity a great service by killing this crazy pointless source of CO2.

    • Re:One can hope this will end the crypto craze (Score:4, Insightful)

      by DrXym ( 126579 ) on Monday November 21, 2022 @04:34AM (#63067615)
      Sadly it won't because people are fucking morons. It has been obvious that cryptocurrency has been a crowd sourced ponzi since its inception but the idiots keep coming. In waves almost - as crypto seems to rise, they sink their savings into this ponzi only for the thing to burst again. And of course many other more elaborate scams have appeared since - rug pulls and such like.

  • I don't believe it (Score:5, Informative)

    by hdyoung ( 5182939 ) on Sunday November 20, 2022 @11:43PM (#63067339)
    If there's one thing we've learned about crypto, it's that a "dollar" of cryptocoin is absolutely not the same as a USD. Is this 3.1 billion actual real US-government dollars that people handed to FTX? I don't believe it. More likely, most of those 3.1 billion "dollars" are my-freshly-minted-crapcoins-that-I-totally-swear-are-worth-a-dollar-each? Which means we're dealing with a lot of fictional numbers entered into a spreadsheet, dressed up to look pretty with the term "crypto" and a grifter's pinky promise.

    Even the "stable coins" have been shown to be barely any better.

    Literally, the only people I will believe in this situation are the federal investigators, after they complete their investigation and the evidence is presented in federal court. At that point, we'll know what actually happened. And that's probably going to take years. And it won't be pretty.

    But no matter how you look at it, SBF is FKD.

    • Comment removed (Score:4, Interesting)

      by account_deleted ( 4530225 ) on Sunday November 20, 2022 @11:48PM (#63067343)
      Comment removed based on user account deletion
      • I haven't followed the details, but I'm interested in what you mean by "crypto assets". Because it's been determined that the people in control can get around the encryption aspect by doing a business-to-business loan and posting collateral in newly-minted shitcoins, thus circumventing the secure aspect of crypto. Then, you add in the fact that a ton of "crypto assets" have fictional valuations, because a lot of people people wrote programs to ping-pong digital tokens back and forth all day to inflate tradi

        • he's going to be in court for literally ever even if he doesn't see prison time.

          He picked the wrong jurisdiction to stay in. The US has an extradition treaty with the Bahamas.

        • Comment removed based on user account deletion
          • I understand what you're saying. My main question is this: did you

            1. Come along and invest an actual BILLION US DOLLARS into FTX.
            2. Set up a small crypto mining operation, burn a few megawatt worth of energy mining whatever-cryptocoin-is-popular-this-quarter, put them into a ping-pong automated trading algorithm to make them look way more popular and actively traded than they actually are, and then hand your "billion dollar account" over to FTX?

            Crypto bros will claim these two things are the same,
            • Comment removed based on user account deletion
              • Wow. Fair enough. If that many real USD went into this, SBF is especially and truly boned. That's an Elizabeth Holmes-level fraud.

                That being said, I'm gonna wait until the actual investigators release their findings to judge. Whenever I read the terms "crypto" and "dollars" in the same paragraph, I heavily discount the validity of the dollar values being stated.

          • Since the price of crypto is down everywhere, they had to have stolen nearly all of the money.

            Wait a second. If you gave them a billion dollar to buy 20,000 bitcoin at $50,000, and bitcoin is down to $20,000, and you wanted to sell your bitcoin and get the money back and everything is legit, you would get $400 million. If they put your million into a secret bank account, and you wanted to sell your non-existing bitcoin, they could just pay you $400 million and have $600 million profit. So what happened must be something else.

    • Garbage in, garbage out. In this case, cash in, garbage out.

    • Re: (Score:2)

      by DrXym ( 126579 )
      The joke about "stable coins", is that it would be better for exchanges to just hold assets in a bank account. Either a major "fiat" currency directly, or something tangible like gold. They could even invite and accounting firm in to audit & certify their holdings and publish that info as a public statement on their website.

      But no, they need to use smoke and mirrors to pretend that the magic beans that they conjured up are directly analogous to USD for "reasons" and then it turns out to be an elaborat

    • Is this 3.1 billion actual real US-government dollars that people handed to FTX? I don't believe it.

      The overwhelming majority of our money supply is money created ex nihilo by fractional reserve banking via commercial banks. The only "real fiat" is the physical money issued by the Fed under authorization by the Treasury. The loans that the Fed gives commercial banks operate under the same principle as fractional reserve bank loans by commercial banks, but happen at a lower level in the money supply.

      The aver

      • Comment removed based on user account deletion
        • In a weird way I wonder if part of crypto's falling lately is money being moved to I-Bonds. I see almost like a hot restaurant mentality to finance vehicles. Crypto was hot, now not so much. I-bonds got hot with their 9% return albeit for 6 months only. Everyone was talking about it, to the point it crashed the treasury site. And yet TIPS which have probably a better return over time are not hot (yet). I remember the late 90's stock boom chatting with another engineer who should have known better I'd think.
          • Comment removed based on user account deletion
            • I bought more recently, waited until TIPS paid a little interest (around 1.6%) and of course the inflation protected part. As you say, your brokerage is probably showing you the secondary market price for your tips, which is less than nominal since current tips offer some interest. Of course if you hold to maturity, you'll get what you paid plus the inflation amount. I think my 5 year TIP is up a bit. I plan on holding though. The other nice thing about tips is there is a secondary market so more liquid tha
      • Comment removed based on user account deletion

  • My investments are safe and will be worth millions!

    • Re:I told everyone to invest in ugly monkey pictur (Score:5, Insightful)

      by Opportunist ( 166417 ) on Monday November 21, 2022 @08:24AM (#63067928)

      That whole ugly ape shit is even more hilarious than you may think. Allow me to take you on a tour into the art of money laundering, or rather, how to launder money with art.

      Art is perfect for this. First, there isn't really a "set" price for a piece of art. Because it's unique. It can have any value you like. Whatever buyer and seller agree on, nobody can really say "oh that's not worth this much, something is fishy". It's art. It has no intrinsic value, it has no "real" value, it's just something cheap arranged in a certain way and suddenly it's really valuable.

      Art auctions are also often anonymous, so that's another really attractive part of it. And art is very easy to transport to countries that aren't too sensitive when it comes to petty little crimes like laundering drug money. You can sell and buy it as often and to whoever you please, putting more and more transactions between you and the money.

      Now, unfortunately, countries that have some irrational problems with the idea of laundering dirty money have started to wisen up to these shenanigans and started to crack down on art laundering. You might have noticed, because art prices took a nose dive a few years ago. Well, NFTs to the rescue! They are even better than ordinary art. First, it's trivial to create them. You no longer need someone to tack a banana to a wall, you can now cut out that middle man and just declare something art. Actually, not even declare it, just take a string of numbers and trade this. Which also takes care of another pesky little problem conventional art has: You have to take the physical thing somewhere. NFTs solve that problem beautifully. You don't even need a laundering haven anymore, just put it in the cloud.

      This is the perfect money laundering tool.

      The absolutely hilarious bit is now that there were actually some dimwits who thought that these things actually have some sort of "artistic" value. Who bought these things with real, "clean" money.

      That was so bizarre to watch...

      • You can pay for real art with cash. Not sure NFTs make a good money laundering vehicle if the real payment amount is easy to track.

        • You can pay for real art with cash. Not sure NFTs make a good money laundering vehicle if the real payment amount is easy to track.

          You can buy NFTs with cash, but it's much more convenient to buy them with cryptocurrencies, washed through an exchange or two as another additional layers of laundering.

          • Crypto transactions are tracked on a public ledger. Washing through an exchange is interesting, but then you're trusting them to not keep (or at least "lose") internal transfer records.
          • Comment removed based on user account deletion
            • You're describing laundering of money one has already obtained through under the table transactions. Parent comment described the laundered transaction of a drug deal, drugs under the table, money and (worthless) art or NFT over the table. There's no reason both options aren't in use.

      • The absolutely hilarious bit is now that there were actually some dimwits who thought that these things actually have some sort of "artistic" value.

        Nah, no one thought they had artistic value. It was just another tulip mania.

        • Oh, there were people who bought NFTs. Not of the apes, but of other "art". Remember that guy who sold his works where you'd decide whether you wanted the NFT or the actual art piece, and whatever you don't choose gets destroyed? Yes, some people took the NFT instead of the actual piece.

      • You insensitive clod..... He TAPED that banana to the wall... :-)

        https://www.cnn.com/style/article/banana-artwork-eaten-scli-intl/index.html

  • Re: Celebrity Endorsers Sued (Score:3, Informative)

    by CommunityMember ( 6662188 ) on Monday November 21, 2022 @12:44AM (#63067429)
    It is likely the celebrities lawyer's motion to dismiss will ultimately be granted as FTX disclosed that the celebrities were participating in a marketing campaign (disclosure is a key to such things).

    • That may depend on how those deals were constructed. If they were doing it for lump sum of money then they are likely in the clear. On the other hand if they can be seen as "buying in" on the system then they might get involved with ponzi allegations - courts have sometimes taken profits from ponzi "early winners" to compensate final losers.

  • With my popcorn watching the whole thing go down. My only experience with crypto is making six bucks on BTC and that was good enough for me. My own personal opinion: crypto is worthless

    • I don't get it either. I can't figure out how it became so huge - and I think it's because I'm the one who lacks knowledge. It seemed to me that it had to be the Emperor's New Clothes. No assets... no fungibility... no trustworthiness... huge with "teenagers" (read: under 30 - HUGE red flag)... espoused by get rich quick schemes... scandal after scandal... bankruptcies everywhere... even the big banking players stayed out until greed pulled them in... I had people in cubicles next to me for a few years push

      • Re: (Score:2)

        by Budenny ( 888916 )

        No, you are not missing anything. At least, you are not missing anything about crypto, it really is worthless and a classic mania, always has been. Which did not prevent it offering great opportunities for speculation. Just as you could make a lot of money trading tulips, as long as you got out in time, and also make lots of money selling fertilizer and greenhouses to the tulipists, as long as you didn't let yourself get stuck with inventory when it all collapsed.

        The latest sign of the madness is that re

      • Re: (Score:3)

        by Budenny ( 888916 )

        I'd add one other thing, which originates with G K Chesterton. He said that the problem with loss of religious faith is not that people believe nothing.

        Its that they start believing in anything at all.

        This is where we are now.

      • It depends on the kind of business you are doing. It seems to be quite good for drug traders and parting fules from their cash.

      • What amazed me is that it lasted so long. One would expect it to go bust in 2014, when even Joe Sixpack on the street was talking Bitcoin and blockchains, but it managed to keep on going well after that.

        At least things went south before exchanges could sell derivatives to banks, and we would have had to do another TARP bailout and shuffling "toxic debt" around like in 2008. Thankfully the Feds were too smart to buy into the hype, and since exchanges didn't want to be regulated, they didn't get bailed out

    • I didn't get any money out of crypto, but countless hours of free entertainment.

  • I won't put into Tether or a CEX unless it can cryptographically prove that it is completely solvent. Solve that problem and crypto will see a golden age.

    • WhatwhatwhatWHAAAAT???

      You want oversight, checks and bounds in cryptocurrency?

      You are supposed to have faith in the blockchain!

      Burn the heretic!

  • review of its global assets and is preparing for the sale or reorganization of some businesses. Nothing left and who would want to waste $$$ tying to bail them out ?

  • Sue the investors (Score:4, Interesting)

    by ballpoint ( 192660 ) on Monday November 21, 2022 @08:03AM (#63067894)

    Every non-private entity (like teachers' funds etc.) that has directly or indirectly invested in FTX should be scrutinized and sued, possibly criminally if any personal links can be proven.

    • Every non-private entity (like teachers' funds etc.) that has directly or indirectly invested in FTX ...

      Not trying to debate you here, but do you really have details about teacher retirement funds depositing in FTX? I would be pretty surprised to see a retirement fund manager "investing" in crypto for the very reason you state. I haven't seen a list of depositors, but I think it's going to just be wealthy individuals. Or perhaps previously-wealthy individuals.

  • If it's not a Ponzi scheme, why would a crypto exchange need a $billion of anything, much less so much so quickly that they couldn't buy it over time? A $billion is a LOT of stuff.

    If they owe that much, I'm absolutely thinking Ponzi.

  • Not really Enron guy, but the guy who supervised the Enron bankruptcy and is now at FTX. We should really put a collection together so that when everything is done, he writes a book that tells us and explains to everyone what really happened. How much real money and how much fictitious money was destroyed. And how much has just disappeared.

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