FTX Trading identifies massive shortfalls at exchanges

By Sarah Lizee

Olympia, Wash., March 3 – FTX Trading Ltd. met with its official committee of unsecured creditors and shared a presentation that describes the magnitude of shortfalls discovered in the fiat bank accounts and digital asset wallets associated with the FTX.com and FTX.US exchanges, according to a press release.

“This is the second in what the FTX debtors anticipate will be a series of presentations as we continue to uncover the facts of this situation,” John J. Ray III, the chief executive officer and chief restructuring officer of the FTX debtors, said in the release.

“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.”

At FTX.com, the presentation shows a massive shortfall. Using spot prices at the petition time, $2.2 billion of total assets have been located on Thursday in the wallets of the accounts associated with the FTX.com exchange, of which only $694 million constitutes “category A assets,” which are the most liquid currencies, such as fiat, stablecoin, bitcoin or Ethereum.

Other assets at FTX.com include $385 million of customer receivables and substantial claims against debtor Alameda Research LLC and related parties.

The presentation shows a $9.3 billion net borrowing by Alameda from the FTX.com wallets and accounts at the petition time.

The presentation shows a shortfall at FTX.US as well. Using spot prices at the petition time, $191 million of total assets have been located today in the wallets of the accounts associated with the FTX.US exchange, in addition to $28 million of customer receivables and $155 million of related party receivables.

This compares to $335 million of customer claims and $283 million of related party claims payable.

With respect to FTX.US, the presentation shows a $107 million net payable by FTX.US to Alameda.

The presentation updates the information concerning the total amount of liquid assets at the FTX debtors and their subsidiaries disclosed on Jan. 17. The total amount of these assets increased to $6.1 billion from $5.5 billion.

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

FTX noted that it is not possible to calculate or predict customer recoveries based on this preliminary information.

FTX has headquarters in the Bahamas. The company filed Chapter 11 bankruptcy on Nov. 11 under case number 22-11068.

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