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A BlockFi lawyer said that the FTX cryptocurrency exchange has more than 1 million creditors, but the company does not have the funds it needs to cover all the debts.
First bankruptcy hearing heldcryptocurrency lender BlockFi, where the firm said that FTX and Alameda Research owed it more than $1 billion: $671 million for an overdue Alameda loan and $355 million in assets frozen on the crypto exchange.
At the hearing, lawyer and law firm partnerKirkland & Ellis Joshua Sussberg stated that the collapse of Terra/Luna was the beginning of the events that led to the current situation. Following in the chain: Celsius Network, Core Scientific, Three Arrows Capital, Voyager and FTX - default or insolvency. BlockFi is trying to prove that FTX is unable to meet its debt obligations.
Sussberg compared the corporate structure of FTX andBlockFi, stating that FTX could have been created for some specific purpose - the company has 130 enterprises that are registered for some unknown reason. However, the BlockFi structures that carry out transactions with each other are created for a specific purpose and are part of the overall infrastructure of the company.
BlockFi now claims to have over 100,000creditors and about $257 million that the company managed to get by liquidating its crypto assets. BlockFi previously sued former FTX CEO Sam Bankman-Fried to sue him for $648 million in Robinhood shares.