A Presentation From FTX Reveals a “Massive Shortfall” in the Firm’s Holdings

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Last Updated on March 3, 2023 by Bitfinsider

Bankrupt cryptocurrency exchange FTX has disclosed a “massive shortfall” in its holdings of fiat money and digital assets, with billions of dollars in missing client funds at both the exchange and its US-based subsidiary, FTX US.

In a presentation made public on March 2 by the exchange, it was revealed that FTX had $2.2 billion in exchange wallets and fiat accounts, $694 million of which was made up of the most liquid “Category A Assets,” which include cash, stablecoins, Bitcoin, and Ether priced at the most recent spot prices.

In addition to $28 million in customer receivables and $155 million in third party receivables, the accounts linked to FTX US only contained $191 million in total assets.

FTX wallets revealed a $9.3 billion net borrowing by Alameda Research, the exchange’s sibling trading company, and a $107 million net payment from FTX US to Alameda.

When contrasted to the deficits on its other held assets, FTX reported surpluses across its less liquid “Category B Assets,” which includes its own FTX Token.

The overall deficit for FTX was $8.6 billion across all purses and accounts, while the deficit for FTX US was $116 million.

The presentation is the second in a “series,” according to John J. Ray III, the chief restructuring officer and CEO of FTX, who stated in a statement on March 2 that FTX is still trying to “uncover the facts of this situation,” adding: “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.”

On February 28, Nishad Singh, a former head of FTX Engineering, entered a plea of guilty to charges of conspiracy to commit wire fraud and commodities fraud.

Singh’s plea comes after several of Bankman-Fried’s close friends allegedly agreed to assist American prosecutors recently.

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