FTX's bankruptcy filings show the situation is much worse than anyone thought. From a million creditors to a stunning lack of oversight, here are the craziest details.

• The downfall of crypto exchange FTX has led to a bankruptcy filing that is full of crazy details.
• Documents filed in court this week reveal much deeper problems than anyone would have thought.
• From billion dollar loans to accountants in the metaverse, these are the craziest details of the FTX bankruptcy filing.

Bankruptcy filings from FTX shed new light on how crypto exchange FTX, once worth $32 billion, lost it all. To put it mildly—it's a doozy.

Anyone who watched a few weeks ago as Sam Bankman-Fried, the CEO of the third largest crypto exchange, flailed through rumors of insolvency on Twitter only to file for bankruptcy a few days later, probably thought, "well this seems bad". To say it got worse would be an understatement.

Among the people looking on in sheer awe at the magnitude of the disaster was new FTX CEO John Ray III, who oversaw the liquidation of Enron in 2001. "Never in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here."

From the guy who presided over the cleanup of the worst financial scandal of its time, that's saying something.

The swift collapse FTX sent shockwaves across the industry and may leave an untold number of creditors—up to one million—holding the bag, including countless customers who had funds on the exchange, many of them retail clients.

Losses for both investors in the company and its customers are expected to be well above ten billion dollars, and the fallout should be long-lasting even though former FTX CEO Sam Bankman-Fried continues to tweet about potential next steps forward.

Here are the craziest details from the chapter 11 bankruptcy filings this week.

FTX's balance sheet was a nightmare

After FTX imploded, Bankman-Fried claimed on Twitter that FTX held about $5.5 billion in "less liquid" crypto tokens.

In reality, according to the bankruptcy filing, FTX's crypto holdings have a fair value of just $659,000 as of September 30. That number could also be lower given the volatility that has wracked the market since then.

Clues were building that the internal numbers were going to be awful, given that FTX founder Sam Bankman-Fried caveated multiple tweet storms about the finances of FTX as "approximate" and "to the best of my knowledge" and "treat all of these numbers as rough."

Bankman-Fried and Co. received $3.3 billion in loans from Alameda Research

The bankruptcy filing of FTX revealed that Alameda Research, the crypto hedge fund sister-company of FTX, directly lent $1 billion to Sam Bankman-Fried. Additionally, Alameda lent another $2.3 billion to Paper Bird Inc., which Bankman-Fried owns a majority stake in.

Other employees at FTX also received loans from Alameda, including $543 million to head of engineering Nishad Singh and $55 million to head of FTX digital markets Ryan Salame. It seems unlikely those loans will be paid back anytime soon.

FTX didn't have an accounting department

Ray said in the bankruptcy filing that FTX had compromised internal systems, faulty regulatory oversight, and inexperienced and unsophisticated people in charge of the company's finances. That includes the company not having an accountant in charge of its finances, which is astonishing for a company once valued at $32 billion.

"The debtors are locating and securing all available materials but expect it will be some time before reliable historical financial statements can be prepared for the FTX Group with which I am comfortable as Chief Executive Officer," Ray said. "The debtors do not have an accounting department and outsource this function." Ray added that any previous financial statments could not be relied on.

Auditing company financials was a firm with offices in the metaverse.

FTX could have more than a million creditors

FTX had initially warned it had more than 100,000 creditors it owed money to following the implosion of the crypto exchange. For a more accurate figure, try multiplying that number by 10.

"In fact, there could be more than one million creditors in these Chapter 11 Cases," the bankruptcy filing said.

FTX may have used corporate funds to buy homes for employees

"In the Bahamas, I understand that corporate funds of the FTX Group were used to purchase homes and other personal items for employees and advisors," Ray said in the bankruptcy filing.

What's worse is there does not appear to be proper documentation for some of these transactions, and certain real estate assets were recorded in the personal name of FTX employees and advisors on the records of the Bahamas, even though it was purchased with money from FTX.

SBF's biggest regret is filing for bankruptcy in the first place

To top it all off, Bankman-Fried's biggest "mistake" amid the implosion of FTX, according to him, is the fact that he filed for chapter 11 bankruptcy in the first place.

Bankman-Fried said in Twitter direct messages to a Vox reporter that those now in charge of FTX were "trying to burn it all to the ground."

"You know what was maybe my single biggest fuckup?" Bankman-Fried said. "The one thing *everyone* told me to do." He said later he was referring to Chapter 11.