FTX Faces Massive $2.2B Asset Shortfall In Wallets Associated With FTX.com, FTX.US Exchanges

FTX Trading Ltd. and its affiliated debtors have revealed there are major shortfalls in the fiat bank accounts and digital asset wallets associated with the FTX.com and FTX.US exchanges.

The company announced Thursday that it met with the Official Committee of Unsecured Creditors to discuss this issue and shared a presentation that will be filed on the docket in the Chapter 11 cases.

According to the presentation, there is a massive shortfall of $2.2 billion in total assets located in the wallets of the accounts associated with the FTX.com exchange, of which only $694 million constitutes "Category A Assets."

At FTX.US, $191 million in total assets have been located in the wallets of the accounts associated with the exchange, in addition to $28 million of customer receivables and $155 million of related party receivables.

John J. Ray III, the CEO and chief restructuring officer of the FTX Debtors, said, "It has taken a huge effort to get this far. The exchanges' assets were highly commingled, and their books and records are incomplete and, in many cases, totally absent.”

Also read: Here's How Much Blockchain Startups Raised In February Funding

“For these reasons, it is important to emphasize that this information is still preliminary and subject to change. We believe it is more important to provide transparency to stakeholders by making this information public now than to wait until we can achieve certainty,” he added.

The presentation also reveals daily deposits and withdrawals from both exchanges during the 90-days prior to the commencement of the Chapter 11 cases for the exchanges.

The total amount of "liquid assets" at the FTX Debtors and their debtor and non-debtor subsidiaries disclosed on Jan. 17, 2023, has also increased from $5.5 billion to $6.1 billion.

This increase results primarily from digital asset pricing source adjustments and newly located digital assets including $202 million of cryptocurrency held at Alameda, $125 million of stablecoin and $57 million of cryptocurrency held at subsidiaries.

The presentation shows a $9.3-billion net borrowing by Alameda Research LLC from the FTX.com wallets and accounts at the petition time, and a $107-million net payable by FTX.US to Alameda Research LLC.

The presentation also provides substantial claims against Alameda Research LLC and related parties.

In response to the presentation, a representative of the Official Committee of Unsecured Creditors said, "We are continuing to review the materials provided by the FTX Debtors and will work with them to explore potential paths forward. We appreciate the Debtors' transparency and look forward to further engagement with them."

Read Next: Crypto Fundraising Soars In February Compared To January: A Bull Market Ahead?

Photo via Shutterstock.