- An FTX Group bankruptcy filing revealed the defunct cryptocurrency business and many affiliates had a total cash balance of $1.24 billion.
- The majority, $751 million, is held in debtor businesses. The remainder, $488 million, is held in non-debtor entities.
- Among all the affiliates, Alameda Research has the greatest stash, at $393 million.
Based on their bankruptcy filings, it appears that the insolvent FTX crypto exchange and its subsidiaries had a total of $1.24 billion in cash as of Nov. 20. This figure is far below what the company owes its top 50 debtors.
The proposed FTX financial advisor, Alvarez & Marsal North America, disclosed in a document filed on Monday that about $751 million is held in debtor entities. The remaining $488 million is held in non-debtor entities. There are around $514 million in liquid assets (cash and equivalents), and $260 million in custody. An additional $465 million exists in restricted funds. These restricted funds can only be utilized for matters like loan repayments.
Earlier this month, crypto mogul SBF’s empire crumbled into a disorderly bankruptcy that left over a million creditors. These events greatly shook the entire sector. The cryptocurrency billionaire went from industry hero to villain in the span of a week. He lost the bulk of his wealth as his $32 billion firm went bankrupt and drew scrutiny from the SEC and DOJ. Today, further information about the group’s financial situation became available, according to a report by Bloomberg Law on Tuesday.
FTX Group Cash Reserves Breakdown
On November 11, the exchange frantically filed for Chapter 11 bankruptcy in U.S. courts. This misleadingly suggested that some of the FTX-affiliated firms were also doing the same. FTX has more than a million creditors, and the fifty largest are owed a total of $3.1 billion, according to a separate court record.
With $393 million, Alameda Research has the most cash on hand of the numerous entities. Holding $171 million, FTX Japan has the most cash on hand of the companies that fall under the FTX silo. The Japanese cryptocurrency exchange is said to be planning to start withdrawals again by the end of the year.
Another document revealed the complex organizational structure of SBF’s approximately 100 firms, the majority of which he owned majority stakes. According to the paper, the parent business of FTX was in Antigua, not the Bahamas, which was listed as the site of the crypto exchange’s headquarters.
On the Flipside
- John J. Ray III, the exchange’s new CEO and a former overseer of financial catastrophes like Enron, has also condemned the bankrupt exchange.
- Ray criticized top management for their inept record-keeping, lack of expertise, and use of corporate cash to buy property in the Bahamas.
Why You Should Care
Institutional and individual investors of all kinds have been caught up in the chaos. It has also hurt the liquidity of digital-asset markets and fueled fears of a domino effect.
Read more on SBF’s collapsed crypto empire: