Collapsed crypto exchange FTX has around $1.24 billion in cash in total – but still owes at least $3.1 billion

In this photo illustration a bitcoin logo seen displayed on a smartphone with an FTX logo in the background.

Avishek Das | Light flare | Getty Images

FTX’s extensive network of entities had a total of approximately $1.24 billion in cash balances as of Nov. 20, according to a new court filing late Monday.

The filing was written by Alvarez & Marsal North America, which is advising FTX on restructuring efforts after the exchange filed for bankruptcy protection earlier this month.

Edgar Mosley, managing director of Alvarez & Marsal North America, said FTX and his team managed to trace “significantly higher cash balances” than they were initially able to identify on Nov. 16.

The balances include FTX and its various “silos”, ranging from the Alameda Research trading group to international affiliates. The largest sum, $393.1 million, comes from Alameda Research Ltd. The second largest balance is $303.4 million in LedgerX, a derivative platform owned by FTX.

FTX’s Japanese unit, FTX Japan KK, has approximately $171.7 million in cash on its books, making it the third largest source of cash for the company. The money is held by FTX and its affiliates with banks and other financial institutions, Mosley said in the filing.

The overall balance represents a marked shortfall on the billions that FTX owes its creditors. A separate filing released on Saturday said the company owed $3.1 billion to its 50 largest unsecured creditors.

It is unclear how FTX will raise the necessary funds to fill this void. Sam Bankman-Fried, the founder of FTX, is trying to negotiate a multi-billion dollar deal with investors to bail out FTX, even after being fired from the company.

Bankman-Fried has been accused by his industry peers of gross mismanagement and fraud.

John Ray III, his replacement, gave a damning account of FTX’s demise last week, saying in a filing that many FTX Group companies “did not have proper corporate governance.”

Ray is now looking to sell or restructure the global FTX group.

FTX’s new management is expected to appear in Delaware bankruptcy court later Tuesday to recount the events that led to the cryptocurrency platform’s sudden collapse and explain the steps it has taken since to secure client funds and other assets.

Bitcoin fell to its lowest level in two years on Tuesday as digital coins continued to suffer the fallout from FTX’s demise. The cryptocurrency was trading at around $15,480, its lowest point since November 11, 2020.

cnbc Business

Not all news on the site expresses the point of view of the site, but we transmit this news automatically and translate it through programmatic technology on the site and not from a human editor.
Back to top button