​Galaxy Digital begins to withdraw assets from FTX

What’s new? Investment company Galaxy Digital has released its financial report for Q3 2022. According to the document, part of the company’s $76,8 million in cryptocurrency and fiat assets are tied to the FTX exchange, which is currently experiencing liquidity problems. $47,5 million of that amount is in the process of being removed from the platform. Galaxy posted a net loss of $68,1 million for the three months, in the same reporting period of 2021, the company recorded a profit of $517,9 million.

Galaxy’s report

What else does the report say? As of September 30, Galaxy retains $1,5 billion in liquidity, of which $1 billion is cash. $422,6 million is in digital assets, $235,8 million of which is held in non-algorithmic stablecoins, primarily USD Coin (USDC).

Partnerships were profitable in Q3. This was mainly due to realized and unrealized gains on digital assets, which generated $52,8 million in net comprehensive income for the company.

Partners’ Capital decreased by 3%, to $1,8 billion, due to the net comprehensive loss for Q3. The decrease came amid an overall increase in cryptocurrency market capitalization of about 7%. Compared to last year ($2 billion), the figure was down 12%.

Galaxy Digital also reported that Damien Vanderwilt will step down as co-president of the company in January. At the beginning of November, the company also announced a 20% staff reduction as part of a team optimization due to macroeconomic problems.

Galaxy Digital is also currently being reviewed by the US Securities and Exchange Commission (SEC) in preparation for listing on Nasdaq. The listing on the US stock exchange is expected in 2023.

What is known about Galaxy? The company was founded by Mike Novogratz, trader, investor, and former head of the Goldman Sachs branch in Latin America. As of September 30, it had $2 billion in assets under management. The company’s shares are traded on the Toronto Stock Exchange (TSX) under the ticker GLXY. As of November 9, the price per security is $4,65, unchanged in 24 hours, according to Investing.com.

What is going on with FTX? On November 2, it became known that most of the capital of crypto trading firm Alameda Research consists of the native tokens of crypto exchange FTX (FTT). Both companies, meanwhile, are owned by entrepreneur Sam Bankman-Fried. After that, crypto exchange Binance began a complete liquidation of its positions in FTT, the rate of the exchange’s token began to plummet, and FTX users faced problems when trying to withdraw funds.

On November 8, Binance CEO Changpeng Zhao announced his company’s intention to acquire FTX. Terms of the deal have not been announced yet and are subject to change based on the current situation. After the announcement, FTT plummeted by 71% and Bankman-Fried lost 93,6% of his fortune.

CoinMetrics suggested that FTX lost its solvency as a result of a $4,19 billion loan to Alameda. Zhao later urged crypto companies not to use their native tokens for collateral.