Bankrupt cryptocurrency exchange FTX was reportedly 10 times more in debt than the combined value of all its liquid assets before it went bankrupt last week, according to new documents.
According to recent information report According to the Financial Times, FTX’s balance sheet reveals the extent of the difficult crypto exchange’s outstanding debt.
The documents show that the day before FTX filed for bankruptcy, it had only about $900 million worth of easily tradeable assets against a staggering $9 billion worth of debt.FTX ‘s new CEO, John Ray, who recently took over the helm after founder Sam Bankman-Fried stepped down, said the company has a “recovery of stakeholders.” We still have valuable assets that allow us to maximize
Most of the company’s liquidity was stock in Bankman-Fried trading giant Robinhood. The former executive owns about $470 million worth of Robinhood stock he bought last year, according to reports.
The report also found that FTX lists about $9.6 billion in total assets, though it’s unclear exactly which investments it could liquidate to cover the company’s debt. The document shows that $5.5 billion of FTX’s listed assets consist of “liquidity” cryptocurrencies, such as the native tokens of decentralized derivatives exchange Serum (SRM). FTX holds $2.2 billion worth of his SRM, according to documents confirmed by the Financial Times. This is a crypto asset with a market capitalization of just $72 million.
The document also reveals that FTX manages $3.2 billion worth of private equity investments that are considered illiquid.
Other assets include a $7 million holding titled “TRUMPLOSE”. This is his ERC-20 token that he should be able to redeem on his FTX based on the results of the last US presidential election. Crypto exchanges also did not list the king’s cryptocurrency bitcoin as an asset, despite his BTC debt worth $1.4 billion.
The balance sheet also shows a negative entry of $8 billion, which the document describes as “hidden and internally improperly labeled ‘fiat currency’ accounts.” .
Bankman-Fried told the Financial Times that the $8 billion negative entry was related to funds “accidentally” sent to Alameda Research, the quantitative trading arm of FTX. Last week, there were reports that Bankman-Fried mishandled his FTX client’s funds by lending them to Alameda.
As Bankman-Fried noted in the uncovered balance sheet,
“There were a lot of things I wanted to do differently than before, but the biggest are represented by two things: [account], and the size of the customer’s withdrawals running at the bank. ”
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