FTX Presentation Exposes ‘Massive Shortfall’ In Firm’s Assets
FTX and FTX US’s exchange wallets and fiat accounts had billions in deficits, discovered in a great effort by the exchange’s CEO.
The bankrupt cryptocurrency exchange FTX has found a “massive shortfall” in its holdings of digital assets and fiat currencies. Billions of dollars worth of customer funds are missing from both the exchange and FTX US, which is based in the United States.
FTX reported $2.2 billion in exchange wallets and fiat accounts on March 2, including $694 million in “Category A Assets” such cash, stablecoins, Bitcoin, and Ether at spot pricing.
Only $191 million in total assets were found in the wallets of FTX US’s accounts, along with $28 million in customer receivables and $155 million in receivables from related parties.
Source: FTX
Alameda Research, which is a sister trading firm to FTX, borrowed $9.3 billion net from the exchange, and FTX US owed Alameda $107 million net.
TX’s “Category B Assets,” which are less liquid and include its own FTX, had surpluses, but they are small compared to the deficits on its other assets.
In total FTX recorded a $8.6 billion deficit across all wallets and accounts while FTX US recorded a deficit of $116 million.
John J. Ray III, the chief restructuring officer and CEO of FTX, said in a statement on March 2 that the presentation is the second in a “series” as FTX continues to “find out the facts of this situation.” He also said:
“It has taken a huge effort to get this far. The exchanges’ assets were highly commingled, and their books and records are incomplete and, in many cases, totally absent.”
Former FTX engineering director Nishad Singh pled guilty to wire and commodities fraud conspiracy on February 28.
Singh’s plea comes after a number of Bankman-close Fried’s friends reportedly agreed to help U.S. prosecutors in the past few months.
