More than four months after it went bankrupt, crypto exchange FTX has finally admitted that it has identified a deficit of $8.9 billion in customer funds that it can¡¯t account for.?
This is the first time the bankrupt cryptocurrency exchange has pinned down how much money has gone missing.
In a public presentation released on Thursday, FTX said it had identified around $2.7 billion of customer assets, compared with $11.6 billion of balances outstanding on customer accounts. The estimated value of FTX¡¯s assets and liabilities are based on crypto prices on the day of the company¡¯s bankruptcy filing in early November, as per Wall Street Journal report.
Commenting on the latest development, John J. Ray III, the Chief Executive Officer, and Chief Restructuring Officer of the FTX Debtors said,?¡°[FTX¡¯s] books and records are incomplete and, in many cases, totally absent. For these reasons, it is important to emphasize that this information is still preliminary and subject to change.¡±
Thus, at this stage, it cannot be anticipated how much compensation affected customers would receive,
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Bankrupt cryptocurrency exchange FTX has revealed a ¡°massive shortfall¡± in its digital asset and fiat currency holdings, with billions worth of customer funds missing from both the exchange and its United States-based arm, FTX US, as per Coin Telegraph report.?
On March 2, the exchange released a presentation showing FTX had $2.2 billion in exchange wallets and fiat accounts, of which $694 million consisted of the most liquid ¡°Category A Assets¡± that include cash, stablecoins, Bitcoin and Ether priced at the latest spot prices.
Only $191 million of total assets were located in the wallets of the accounts associated with FTX US, in addition to $28 million of customer receivables and $155 million of related party receivables.
FTX wallets showed a $9.3 billion net borrowing by the exchange¡¯s sister trading firm, Alameda Research, and a $107 million net payable to Alameda from FTX US.?FTX recorded surpluses across its less liquid ¡°Category B Assets,¡± which includes its own FTX Token but the holdings are insignificant compared to the deficits on its other held assets.
In total FTX recorded an $8.6 billion deficit across all wallets and accounts while FTX US recorded a deficit of $116 million, as per the report.
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John J. Ray III, the CEO of FTX, said in a March 2 that statement the presentation is the second in a ¡°series¡± as FTX continues to "uncover the facts of this situation.¡±?
Earlier this week, 27-year-old former FTX engineering director Nishad Singh pleaded guilty to charges of fraud.?Singh¡¯s plea follows a number of Bankman-Fried¡¯s close associates reportedly agreeing to cooperate with U.S. prosecutors in recent months.
However, despite saying 'I am sorry" earlier in November when the crypto exchange went bankrupt, FTX's former CEO Sam Bankman Fried has pleaded 'not guilty' of charges in the US court. If all the charges against him are proven, he may face jail of upto 115 years.
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