FTX Ramps Up Cash Reserves In Attempt To Repay Customers Amid Bankruptcy

FTX is strategically liquidating its crypto assets and bolstering its cash reserves. This initiative is part of the bankrupt firm's efforts to repay customers who have been unable to access their accounts since the platform's downfall.

What Happened: Key affiliates of FTX, including FTX Trading Ltd. and Alameda Research LLC, significantly increased the group's cash to $4.4 billion by the end of 2023, a substantial rise from the $2.3 billion recorded in late October.

This figure is expected to be higher considering all of FTX's affiliates. The company raised $1.8 billion through selling some digital assets as of Dec 8, reports Bloomberg. 

FTX is also engaging in Bitcoin derivative trades to manage its exposure to the cryptocurrency and generate additional revenue from its digital holdings. Plans to restart the exchange potentially are also being explored, according to the report.

Since its implosion, FTX's bankruptcy advisers have been locating assets and negotiating agreements to benefit customers, especially those with smaller accounts.

Also Read: Bankman-Fried's Move To Jail Sparks Strong Reactions On X: 'Hope You Enjoy Prison'

The firm has initiated lawsuits against former associates of Sam Bankman-Fried and other crypto entities that withdrew funds before the bankruptcy declaration.

Despite these measures, FTX has admitted that full customer repayment is unlikely. The trading value of customer claims has risen recently, with claims over $1 million trading at approximately 73 cents on the dollar, an increase from 38 cents in October.

However, FTX.com customers are expected to incur a more significant proportion of the losses.

Now Read: Flights For FTX: How Bankman-Fried Spent Millions On Private Jets To Travel And Deliver Amazon Packages

This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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