Bankrupt FTX Had $9,000,000,000 in Liabilities With Only $900 Million in Liquid Assets Prior to Collapse: Report

New paperwork reveal that bankrupt crypto trade FTX reportedly had liabilities 10x bigger than the worth of all of its liquid belongings mixed previous to its implosion final week.

In line with a latest report by the Monetary Occasions, FTX’s steadiness sheet reveals the extent of the embattled crypto trade’s excellent debt.

The doc reveals that FTX had solely about $900 million price of simply tradable belongings towards a staggering $9 billion price of liabilities a day earlier than the agency filed for chapter. FTX’s new CEO John Ray, who not too long ago took the helm from founder Sam Bankman-Fried after his resignation, says the agency nonetheless has invaluable belongings that might enable the corporate to “maximize restoration for stakeholders.”

A big portion of the corporate’s liquid belongings had been Bankman-Fried’s shares of buying and selling big Robinhood. In line with the report, the previous government has about $470 million price of Robinhood shares, which he bought final yr.

The report additionally finds that FTX has listed about $9.6 billion in total belongings, although it’s unclear precisely which investments could be liquidated to cowl the corporate’s liabilities. The doc reveals that $5.5 billion of FTX’s listed belongings are made up of “much less liquid” cryptocurrencies such because the native token of decentralized derivatives trade Serum (SRM). In line with the supplies seen by the Monetary Occasions, FTX holds $2.2 billion price of SRM, a crypto asset that has a market cap of simply $72 million.

The doc additionally reveals that FTX controls $3.2 billion price of personal fairness investments thought-about as illiquid.

Different belongings embrace a $7 million holding titled “TRUMPLOSE,” an ERC-20 token that’s imagined to be redeemable on FTX primarily based on the outcomes of the earlier US presidential elections. The crypto trade additionally didn’t record king crypto Bitcoin as an asset regardless of having $1.4 billion price of BTC liabilities.

The steadiness sheet additional reveals a damaging $8 billion entry, which the doc describes as “hidden, poorly internally labeled ‘fiat@’ account.”

Bankman-Fried tells the Monetary Occasions that the damaging $8 billion entry had been associated to the funds “by accident” despatched to Alameda Analysis, FTX’s quantitative buying and selling department. Final week, a report claimed that Bankman-Fried mishandled FTX buyer funds by loaning them over to Alameda.

As said by Bankman-Fried within the uncovered steadiness sheet,

“There have been many issues I want I might do otherwise than I did, however the largest are represented by these two issues: the poorly labeled inner bank-related [account], and the scale of buyer withdrawals throughout a run on the financial institution.”

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Featured Picture: Shutterstock/Yurchanka Siarhei

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