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The backstory: Last November, cryptocurrency exchange FTX's bankruptcy caused quite a stir in the crypto world. The US Department of Justice (DOJ) is now investigating allegations of fraud resulting in billions in losses for around 9 million customers and investors.
More recently: FTX's founder, Sam Bankman-Fried, has been accused of mishandling customer funds, which he denies. But the plot thickens because two of his former partners admitted to the charges and are working with prosecutors. Bankman-Fried's trial is set for October 2023.
The development: Last week, FTX made headlines again when it declined the DOJ's request for an independent investigation into the exchange's collapse. Instead, it said it's conducting its own internal review under new management, including into Bankman-Fried's family.
FTX and the official creditors' committee for the bankruptcy came together to challenge court-appointing external examiners. Both argued that these examiners cost too much and don't provide much benefit to the creditors. FTX also submitted a revised "creditor matrix" to the court. The list includes government agencies from the US, Japan and Switzerland, big banks like Goldman Sachs and JPMorgan, the Hong Kong Monetary Authority and Hong Kong's Securities and Futures Commission, among many others.
Reports show that the top 50 creditors are owed around US$3 billion together, but there's no information on the debt type or amount. FTX said the revised list is broad and aims to reach out to everyone involved in the bankruptcy process, so not all the names on the list are necessarily creditors of FTX. So, for example, although Goldman Sachs is listed, it doesn't appear to be a direct creditor to FTX and hasn't filed a claim against the company.
"This type of creditor matrix is prepared by the debtors for the purpose of providing notice to interested parties in a bankruptcy proceeding and is not necessarily evidence of a creditor relationship," said Goldman Sachs's spokesperson.
"I am truly sorry for what I did," said the former CEO (and once Bankman-Fried's girlfriend) of crypto hedge fund Alameda Research in court. "I knew that it was wrong."
"We note that the list is compiled by a US financial advisory firm and it contains a few thousand names including many regulatory bodies and public authorities in various jurisdictions," said an HKMA spokesman. "We are not in a position to comment on the rationale for including the HKMA on the list."