Many have lost their investments and savings after the cryptocurrency FTX filed for bankruptcy. Some are average janes and joes while others are popular with millions if not billions to their name. Among those are Tom Brady and his ex-wife Gisele Bündchen.
Social Status Might Not Be Enough for Reimbursement
FTX has been under the microscope since its financials started to go south, New bankruptcy filings were revealed showing that Tom Brady holds more than 1.1 million common shares in the now-collapsed FTX exchange, while supermodel Gisele Bündchen has 680,000.
The Tampa Bay Buccaneers quarterback and the supermodel were both brand ambassadors for FTX since 2021, according to The Verge. They also had a bunch of commercials that advertised the now-bankrupt cryptocurrency exchange.
Tom Brady's investment was valued at an estimated $45 million, and Gisele Bündchen's was worth around $25 million. John Ray III, the current CEO of FTX said that they won't be able to recover all of the losses.
Ray took over Bankman-Fried's position after the company filed for bankruptcy in November. Reports say that in bankruptcy proceedings, bondholders are more likely to recover some of their losses, which isn't the case for equity investors who may lose everything.
$5 billion worth of assets, cash, liquid cryptocurrency, and liquid investment securities have been recovered by FTX, but it's still not enough to compensate for the losses of all of FTX's customers and creditors.
FTX is Drowning in Debt
The company still owes a lot of unsecured creditors, ten of which need to be paid over $100 million each. The ten is among the top 50 creditors that FTX still owes, which overall amounts to around $3.1 billion in debt, according to CNBC.
FTX is still set to pay its biggest unsecured creditor more than $226 million, while the others were owed around $21 million or more. Taking all the customers into account, FTX may owe more than a million people in total.
All of this boils down to FTX's previous ties with Alameda Research, specifically the $8 billion worth of customer money that was "lost." Authorities discovered that even if Alameda Research and FTX were supposed to operate separately, there were transactions that linked the two.
FTX's code was altered allowing Alameda Research to remain unaffected should FTX begin to bleed money. Basically, Alameda Research became Bankman-Fried's unlimited source of money for whatever he wanted to spend.
Reports say that the former FTX CEO spent billions from the funds, mostly for personal purchases and investments. When questioned why everything turned out the way it did, Bankman-Fried claimed that it was due to financial mismanagement.
Speculations say that Sam Bankman-Fried lied to company ancestors since the beginning and that he intended to defraud all the customers and creditors for his own gain. This was all while he assured customers that FTX was safe, tested, and conservative.
