FTX companies owe more than $3 billion to their largest creditors

Sam Bankman-Fried's businesses owe more than $3 billion to its biggest creditors, according to court filings, as the cryptocurrency group's massive bankruptcy case gets underway.

Bankman-Fried-founded crypto exchange FTX and affiliates on Sunday filed a list of its 50 largest creditors, all of whom are customers, two of which are owed more than $200 million. The companies' total liabilities are estimated at more than $10 billion, according to previous filings, and there may be more than 1 million creditors.

Publication of the list in Delaware's Chapter 11 bankruptcy proceedings had been delayed as bankruptcy trustees struggled to find reliable records at FTX Group, which collapsed earlier this month following a liquidity crisis and allegations that it mishandled customer funds.

John Ray III, the bankruptcy expert who took control of the business and oversaw Enron's liquidation, said in previous filings that he had never seen "such a complete failure of corporate controls and such a complete absence of trustworthy financial information."

FTX said it may need to update the list of creditors as “investigation[s] continue regarding the amounts listed, including payments that may have been made but are not yet reflected on the [company’s] books and records.”

The filings show that FTX owes 10 customers more than $100 million. The top 50 creditors, whose names are redacted in the filing, are all owed more than $20 million. FTX said in previous court filings that disclosing the names of its large account holders would be anti-competitive.

FTX's customers included large financial groups that traded cryptocurrencies, such as hedge funds. In contrast to traditional exchanges, cryptocurrency trading venues usually also take custody of customer funds. Customers who were unable to withdraw their money before the company stopped withdrawals will now have to wait a long time to get their assets back.

In other recent cryptocurrency bankruptcy cases involving Voyager Digital and Celsius Networks, a key legal issue has been determining whether account holders are unsecured creditors or have higher priority status in determining who will receive recovery payments first. Another question that will likely arise is whether account holders who withdrew their funds shortly before filing for bankruptcy will be subject to clawbacks.

The collapse of the exchange, which until this month was widely viewed as one of the most reliable trading venues for digital assets, has fueled fears that other companies could be at risk from their exposure to FTX and a crisis of confidence in the market.

Shares of Silvergate, a US bank known for its crypto exposure, fell around 30 percent last week. The bank said it has “the liquidity and capital ratios to support volatility.”

Hedge fund Galois Capital told clients earlier this month that “approximately half of our capital is tied to FTX.” Based on Galois' assets under management as of June, that could be around $100 million.

In another filing on Saturday, FTX said the company has 330 employees around the world but is experiencing "extraordinary turnover." It asked the court for permission to continue paying the remaining employees, who it said were critical to the bankruptcy case.

FTX revealed in court filings that new CEO Ray billed for his time at $1,300 an hour and was paid a $200,000 retainer fee. It also hired three new executives to help with the bankruptcy, including a chief financial officer.

An initial court hearing is scheduled for Tuesday morning in federal bankruptcy court in Delaware before Judge John Dorsey.