FTX confirms loss of $8,9 billion in customer funds
The platform disclosed the shortage of assets for the first time
03.03.2023 - 08:15
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2 min
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It has been almost four months since the cryptocurrency exchange FTX collapsed. Yet, developments pertaining to the exchange, its executives, and customers continue to take place. A recent report from the Wall Street Journal pointed out that $8.9 billion worth of customer funds have been unaccounted for and therefore missing.
Shortfall to be attributed to Alameda Research?
This is the first time the exchange has revealed a number pertaining to the fund deficiency. The exchange has reportedly pinned down around $2.7 billion in customer assets, relative to $11.6 billion of the balance outstanding on customer accounts. The estimated value of FTX’s assets and liabilities is based on asset prices in November 2022, when the firm filed for bankruptcy.
Alameda Research had borrowed around $9.3 billion from customer accounts before bankruptcy. Thus, the current $8.9 billion hole can be attributed to Alameda Research. FTX did not clarify if the funds were borrowed with or without customer consent. According to a financial update filed, FTX’s sister company only had around $475 million in cash in its accounts as of Jan. 31.
Commenting on the latest development, John J. Ray III, the Chief Executive Officer, and Chief Restructuring Officer of the FTX Debtors said,
“[FTX’s] books and records are incomplete and, in many cases, totally absent. For these reasons, it is important to emphasize that this information is still preliminary and subject to change.”
Thus, at this stage, it cannot be anticipated how much compensation affected customers would receive, even though the exchange has tracked down $2.7 billion. However, around $1.5 billion of that said amount includes illiquid crypto assets like FTX’s token, FTT.
This material is taken from the website https://watcher.guru.
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