Earnings Show Galaxy Digital Has $77M In FTX Exposure

The crypto business of Mike Novogratz still has over $47 million of FTX exposure stalled in the withdrawal procedure.

Galaxy Digital disclosed in its recently issued third-quarter earnings report that it had over $76 million in exposure to FTX, the mainstream cryptocurrency exchange that is now undergoing a liquidity problem.

According to the report, the $78,800,000 in exposure consists of both cash and digital assets. Within this amount, $47.5 million is still being withdrawn.

FTX seems to have ceased processing withdrawals on Tuesday, after an avalanche of net outflows early in the week.
In addition, the firm had a net loss of $68.1 million in Q3, compared to a net profit of $519 million in Q3 2021.

Mike Novogratz, CEO of Galaxy, said on the company’s earnings conference call that the FTX disaster had “placed a short-term wrench” in the crypto market. As a result of Binance’s refusal to bail out the company, the overall market capitalization of cryptocurrencies has fallen below $800 billion.

Meanwhile, Galaxy’s stock (GLXY) has decreased by 15% to $3.92 as of Wednesday.

Novogratz noted that the business has historically been “agile” enough to avoid controversies and would ultimately revert to being associated with the macroeconomy.

Chris Ferraro, co-president of Galaxy, said that the business has no exposure to Alameda, the recently defunct sibling company of FTX.
Last week, it was revealed that Galaxy Digital intended to downsize its workforce in consideration of “optimal team structure and strategy.”