At Least $1 Billion of Client Funds Missing at Failed Crypto Firm FTX: As of Nov. 20, FTX’s extensive network of organizations had a combined cash balance of over $1.24 billion, according to a fresh court document released late Monday. Alvarez & Marsal North America, which is assisting FTX with its restructuring operations after the exchange filed for bankruptcy earlier this month, wrote the filing.
Alvarez & Marsal North America’s managing director, Edgar Mosley, stated that by Nov. 16, FTX and his team had been able to track “much greater cash levels” than they had first been able to locate. Included in the accounts are FTX and all of its “silos,” which range from the trading firm Alameda Research to its overseas operations.
Alameda Research Ltd. contributed the biggest amount, $393,1 million. LedgerX, a derivatives platform that FTX controls, has a balance of $303.4 million, which is the second-largest amount. With approximately $171.7 million in cash on hand, FTX Japan K.K., the business’s subsidiary in Japan, ranks third in terms of cash flow for the company.
According to Mosley in the petition, FTX and its affiliates have cash in their accounts at banks and other financial institutions. In comparison to the billions that FTX owes its creditors, the overall balance shows a significant deficiency. The business owed its 50 largest unsecured creditors $3.1 billion, according to a different filing on Saturday.
How FTX will raise the money required to close that deficit is unclear. Even after being fired from the company, Sam Bankman-Fried, the founder of FTX, is attempting to negotiate a multibillion-dollar bailout package with investors.
His contemporaries in the sector have accused Bankman-Fried of fraud and blatant mismanagement. In a filing this week, John Ray III, who took over for him, painted a devastating picture of FTX’s demise, claiming that several of the FTX group companies “did not have sufficient corporate governance.” Currently, Ray is looking to sell or restructure the international FTX group.
EXCLUSIVE At least $1 billion of client funds missing at failed crypto firm FTX – sources https://t.co/6iTs0Hxdmy pic.twitter.com/qsgKEvk4sI
— Reuters (@Reuters) November 12, 2022
The new management of FTX is anticipated to show up in the Delaware bankruptcy court later on Tuesday to relate the circumstances surrounding the sudden failure of the cryptocurrency platform and to outline the actions it has subsequently taken to protect customer monies and other assets.
Tuesday saw a two-year low for Bitcoin as the effects of FTX’s demise were still being felt by other cryptocurrencies. The price of the cryptocurrency was about $15,480, which was the lowest since November 11, 2020.
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