SBF says latest revelation is “misleading” about FTX.US solvency SBF says latest revelation is “misleading” about FTX.US solvency
FTX management was making a "meaningless comparison" by not including the bank balances as part of the bankrupt's firm assets, said SBF.
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Updated: Aug. 11, 2023 at 1:56 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
FTX founder Sam Bankman-Fried (SBF) said on Jan. 17 that FTX.US was solvent, adding that customers should be given access to their funds.
SBF was reacting to new revelations made by the FTX management about the shortfalls in the U.S. subsidiary.
The claims are “misleading” because it does not consider the $428 million in the exchange’s bank accounts as an asset, according to SBF. He argued that FTX.US has at least $111 million and roughly $400 million excess cash to match customer balances.
SBF said in his substack report that the management did not define the kind of assets they found to be “substantially less,” nor did they specify if the customer balances included non-USD balances.
For context, SBF said FTX.US Derivatives (LedgerX) had $250 million in a segregated bank account meant for its regulatory capital push. The funds in the bank account surpass the $181 million the management said they had found as of the petition date, according to SBF.
The FTX management was making a “meaningless comparison” by not including the bank balances as part of the bankrupt’s firm assets.
SBF concluded:
“S&C claims that FTX US has a shortfall. That claim is false. Based on S&C’s own data provided in the same court presentation, FTX US had roughly $609m of assets ($428m USD in bank accounts, plus $181m of tokens) backing roughly $199m of customer balances. FTX US was solvent when it was turned over to S&C, and almost certainly remains solvent today.”
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
FTX US Derivatives
FTX US Derivatives is a digital currency futures and options exchange and clearinghouse regulated by the US Commodity Futures Trading Commission (CFTC).
Sam Bankman-Fried is the former CEO, and co-founder of defunct crypto exchange FTX and Alameda Research.
