When FTX made the first court filings at the end of November 2022 as part of its Chapter 11 proceedings, the new management of the bankrupt crypto exchange claimed that 22% of its customers hailed from the Cayman Islands.
This was befuddling at the time and the data has not become clearer after FTX published a list of potential creditors on 25 Jan.
A search of the list of creditors, containing more than 100 pages and filed with the US Bankruptcy Court in Delaware, shows only a handful of Cayman Islands-based entities.
Almost 3,400 individuals of the 7,492 names on the list are redacted. Of the remaining 4,100, only 17 have an address in, or a connection to, the Cayman Islands.
In addition, the document states that almost 9.7 million customer names are redacted and on file with the clerk of the court.
In December, FTX said it may have more than 1 million creditors. The top 50 creditors alone have filed claims for more than US$3 billion.
Some of the Cayman Islands-based companies were already known to be creditors of FTX or its related companies.
Others on the list, like the Office of the Attorney General Samuel Bulgin, may not be creditors at all. The attorney general did not respond to questions from the Compass by press time.
In a statement filed with the bankruptcy court, restructuring firm Alvarez and Marsal noted that the list is intended to be very broad for service purposes and includes parties who may appear in the debtors’ books and records for any number of reasons.
“As a result, inclusion of a name on the Matrix does not necessarily indicate that the party is a creditor of any of the Debtors.”
The list includes, for instance, government agencies and regulators around the world.
FINMA, Switzerland’s financial market supervisor, is also mentioned, but a spokesperson told Reuters the regulator has no idea why it would be listed as a creditor.
Investment bank Goldman Sachs, also on the list, said it has not filed a claim.
The companies on the FTX creditor matrix range from banks, airlines and media companies, such as The New York Times and Wall Street Journal, to large tech companies Apple, Meta and Netflix.
Crypto-related companies that may be owed money by FTX include Coinbase, Galaxy Digital, Yuga Labs, Circle, Bittrex, Chainalysis, and affiliates of Binance.
Wide range of potential creditors
The list of potential Cayman creditors covers an array of venture capital firms, investment funds, digital asset financial companies and crypto-related projects.
Offshore law firm Walkers, one of many legal firms in the document, confirmed that it is acting as counsel to various FTX group companies in the US Chapter 11 proceedings.
Among the Cayman creditors is also Galaxy Digital Labs. Galaxy Digital, the crypto-focused financial services firm, said in November that it had about a $76.8 million exposure to FTX.
Cayman-registered investment funds on the creditor list are related to Korea’s Rok Capital, Pangea Fund Management, and Vy Space, a venture capital fund managed by Vy Capital.
Venture capital firm Insight Partners participated in two FTX funding rounds and reportedly invested about $40 million directly into the crypto exchange. Four of the firm’s funds are listed as FTX creditors.
Venture capital fund Mayfield XV, a Cayman exempted limited partnership, was another investor in FTX.
Named FTX creditor Tai Mo Shan Limited obtained a virtual asset service provider licence from the Cayman Islands Monetary Authority in December 2022. The Cayman company is part of US-based proprietary quantitative trading firm Jump Trading Group run from Singapore.
Corro LLC, an affiliate of Kadena, involved in the blockchain platform’s token sale, and Alvara Labs, the developer of the Lens protocol, are also on the list.
Another company featured as a potential creditor is Brave Software International SEZC, the developer of the privacy-focused web browser that offers a cryptocurrency token (BAT) to compensate users who opt to see advertisement on Brave’s ad network.
The browser featured widgets from FTX and other crypto exchanges to swap the digital tokens for other assets.
$5.5 billion in liquid assets identified
Earlier this month, lawyers for FTX told the bankruptcy court the debtor companies had identified $5.5 billion in liquid assets, consisting of $1.7 billion of cash, $3.5 billion of liquid cryptocurrency and FTT tokens, and $300 million of liquid securities.
To maximise the recovery of assets, advisors to FTX are exploring the sale of certain subsidiaries, illiquid investments and properties in the Bahamas, as well as the potential for reorganisation of FTX’s US and international exchanges.
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