FTX Collapse: $8.7 Billion Hole in Customer Assets Uncovered

FTX Exchange Deficient of Assets

• FTX finds only 1 BTC out of 1,591 customer-owned at time of collapse.
• The now-defunct exchange holds a total of $8.7 billion in liabilities to customers.
• The exchange has identified only $2.2 billion in assets with $694 million highly liquid currencies and $385 million customer receivables.

Court Documents Reveal Financial Hole

According to newly filed court documents, the cryptocurrency exchange FTX is facing an $8.7 billion hole in customer assets between FTX.com and FTX US. This was revealed during a presentation of the company’s current assets and liabilities on Mar 2nd by its CEO John J. Ray III, who stated that their books and records are incomplete or totally absent in many cases. Currently, the company holds only one Bitcoin against the 1,591 it owes to customers; these holdings are offset by Alameda Research’s net borrowings of $9.3 billion – resulting in an overall deficit for FTX’s customer accounts when compared to what they owe customers overall.

$2.2 Billion Assets Identified – But Still No Preferred Creditor Details

The filing reported that approximately $2.2 billion worth of assets have been identified so far –with only $694 million being held in highly liquid currencies like fiat, stablecoin, BTC or ETH; along with customer receivables worth around $385 million (while there are outstanding claims totaling up to around $618 million). Additionally unauthorized transfers have withdrawn an additional sum of approximately $432 million from wallets linked to both FTX exchanges combined – further exacerbating their financial difficulties and making it unlikely that all customers will be paid back in full even with the successful conclusion of the bankruptcy proceedings which could take years before being complete according to legal experts familiar with such cases .

FTX CEO Promises Continued Public Disclosure

In response to this situation, current FTX CEO John J Ray III promised to continue public disclosure about any new developments related to their bankruptcy case as well as efforts taken by them for maximizing return for creditors through asset recovery initiatives or other scenarios which may be available depending upon how things develop going forward .

Conclusion

FTX is currently facing an unprecedented financial crisis due to missing or incomplete accounting records which resulted in insufficient funds being held by them against customer liabilities amounting up to roughly 8.7 billion dollars spread across cash/stablecoins & crypto assets including Ethereum ,Solana & hundreds of other tokens users were previously allowed trading access too . Despite identifying 2$billion worth of assets ,the unauthorized transactions made from wallets linked with both exchanges have further worsened its situation & makes it highly unlikely all creditors will receive their dues back anytime soon , specially once bankruptcy proceedings start taking place which could take years before reaching a conclusion .

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