The now-defunct cryptocurrency exchange platform FTX is said to have published a preliminary investigation in which it purportedly presented its current findings to interested parties. According to the aforementioned analysis, the corporation has verified the worst: a “significant shortage” in client assets, estimated to be worth $2.2 billion, has been discovered. Furthermore, just $694 million of the total is in liquid assets like cash, stablecoins, Bitcoin, or Ether.
The Issue Unveiled on The Latest Company Analysis
It is well known that Alameda Research, FTX’s trading firm, borrowed money from its clients, which led to the company’s demise. It was stated in the aforementioned presentation that the corporation’s consumers have given Alameda $9.3 billion. Moreover, Alameda took out a separate $191 million loan from users of the US-based exchange FTX US.
Sam Bankman-Fried, the discredited co-founder of the company and former CEO, has in the past asserted that FTX US was ‘totally’ exempt from the corporation’s issues. Contrary to the aforementioned assertion, the most recent business investigation has revealed that FTX US also has a deficit in the hundreds of millions.
John J. Ray III, the current CEO of the company that took over the bankruptcy, has claimed that they have put in a lot of effort to get this far in the bankruptcy process. He went on to say that the assets of the exchanges were highly commingled. Furthermore, the company’s books and records are often incomplete or non-existent.
However, Ray later stated that the aforementioned information is still in its preliminary stages and thus subject to change. Furthermore, the new CEO stated that by releasing the information, they hope to provide transparency to their stakeholders. He emphasized that they chose to make the information public right away rather than wait until they had certainty.
FTX Then and Now
The corporation was formerly regarded as one of the biggest cryptocurrency exchanges in the world. Up until news broke that its sibling business, Alameda Research, was insolvent, the cryptocurrency exchange site remained operational. Binance allegedly contributed to FTX’s demise by selling off its ownership of the FTT token, the cryptocurrency used by the company.
Following the aforementioned bad circumstances that the FTX encountered, its consumers withdrew billions of dollars from the exchange. FTX has formally filed for bankruptcy in the past week. Following this, multiple pieces of evidence that showed Bankman-Fried had been spending customer funds unlawfully resulted in his arrest and indictment for securities fraud.