Court filings show that FTX debtor companies have cash balances totaling $1.24 billion.
The news has also surfaced US prosecutors were investigating FTX before the collapse of the company.
A summary of the balances, prepared by business consultancy firm Alvarez & Marsal and filed by Edgar Mosely, who oversees the team, details entries by each of the four previously identified silos and submitted to the court by FTX CEO John Ray. Reported.
the Alameda silo holds $400 million; dotcom silo $255 million; Ventures Silo $8.6 million; and WRS Silo $86 million.
Debtor accounts total $751.5 million and non-debtor accounts total $487.7 million.
FTX regulated companies have money in the bank
The non-debtor accounts include FTX Digital Markets, FTX Philanthropy, Embed Clearing, Embed Financial Technologies and LedgerX — all of those entities are considered solvent according to previous determinations filed in court by CEO Ray over the weekend.
The total exact cash balance is $1,239,306,000.
134 of the FTX Group companies have filed for Chapter 11 in the US with liabilities estimated to exceed $10 billion.
The top 50 creditors alone owe $3.1 billion, so the cash shortfall before settlement is far less than the amount needed to make creditors whole.
FTX has a net operating loss of $3.7 billion
Alvarez & Marsal also pointed out in their court filing that they had federal net operating losses of at least $3.7 billion as of December 31, 2021, according to tax returns from FTX and related companies.
FTX’s minimum state net operating loss was $715 million.
And in an effort to trace the funds, FTX has requested that the exchange look for assets being deposited that are the result of unauthorized transfers, stating that any such assets be returned to the “bankruptcy estate.” should go:
Crypto prices find their footing
Against the backdrop of rising contagion fears, crypto prices have calmed down after yesterday’s decline.
After falling to a low of $15,500, bitcoin is back above $16,000 at the time of writing.
Ethereum has bounced back a bit with a 2% increase at the price of $1,129.
Bahamas vs US – Who’s in charge of clearing up this mess?
On November 10, the Securities Commission of the Bahamas (SCB) froze the assets of FTX Digital Markets “and related parties”, a day before it filed for bankruptcy in a US court.
However, despite that freeze, it was suggested in a filing by FTX that Sam Bankman-Fried was able to transfer digital assets to Bahamas authorities.
The reference to “unauthorized access” could also be related to the hack that linked the ‘FTX account drainer’ who was selling ETH yesterday, causing the coin’s price to drop by nearly 10%.
On November 15, FTX Digital Markets filed a Chapter 15, which seeks to place the Bahamas court proceedings on the same level as the Delaware court.
But since then, on November 17, the Government of the Bahamas Transferred all FTX Digital Markets digital assets to wallet under SCB’s control – a move by lawyers acting for FTX Trading, which say SCB is undermining bankruptcy proceedings in the US and breaking established rules that require a US judge to “stay” or freeze assets is required to authorize any movement.
The US attorneys claim, “It appears that the automatic withholding has not been mitigated by a government actor.”
The result of all this is that the joint provisional liquidators appointed by the SCB to run FTX Digital Markets now insist that FTX Trading had no authority to file a Chapter 11 bankruptcy petition.
FTX is the service company of the Digital Markets group, so the Bahamas authorities have a point.
In a sign of some movement, a Bahamas court has now agreed to allow his Chapter 15 petition to be heard in a Delaware court.
The dispute between the Bahamas and the US has also been given more context by tweets coming from Sam Bankman-Fried (SBF), who says he is working to raise funds to bring FTX back from the dead.
In court filingFTX trading advocates are making no fuss about what they think:
“Mr. Bankman-Fried, co-founder, and controlling owner of all debtors and FDM [Bahamas-based FTX Digital Markets]appears to support JPL’s efforts [joint provisional liquidators] To expand the scope of FTX DM proceedings in the Bahamas, to dilute these Chapter 11 cases, and to transfer assets from debtors to accounts in the Bahamas under the control of the Government of the Bahamas.
Last Friday SBF told cnbc He was still working on the bailout: “I think we should try to get as much value as possible for the users. I hate what happened and wish I had been more careful.”
FTX CEO Ray has emphasized that the SBF has no “running role” in FTX:
FTX’s new CEO is currently conducting a strategic review of its assets, and a court filing highlights that regulatory bodies appear to be solvent, as noted earlier in this article:
“Based on our review over the past week, we are pleased to note that several regulated or licensed subsidiaries of FTX, both inside and outside the United States, have solvent balance sheets, responsible management and valuable franchises.”
He added that it’s “priority … was to explore a sale, recapitalization or other strategic transaction.”
Judge John Dorsey presided over the first day of Delaware court hearings today and will begin by attempting to resolve the dispute between the Bahamas and a US court.
FTX Japan Withdrawals to Begin Before the End of the Year
There was some good news for clients of FTX Japan today, with its executives saying that withdrawals will resume before the end of the year.
in one Interview with state TV broadcaster NHKThere was no indication from the FTX support team that funds were not available for withdrawal.
Instead the access delay is because FTX Japan uses a native payment system, and that functionality has been suspended.
As a result, the Japanese subsidiary is in the process of developing its own system to enable the reopening of customer withdrawals.
When financial authorities forced FTX Japan to suspend all trading on November 10, the company had ¥19.6 billion in cash and deposits.
All members of the FTX group of companies, including FTX Japan, are being considered for disposal as part of a strategic review announced in US court filings.
Genesis needs to raise $1 billion or go bust
according to a Bloomberg reportGenesis continues to “struggle” to raise $1 billion to avoid bankruptcy.
Origination halted redemptions and loan originations on 10 November. It was also revealed at the time that $175 million was locked in an FTX account.
Genesis is owned by Digital Currency Group, which also owns the Grayscale Bitcoin Trust.
As we said, Binance is believed to be in talks To secure funds for the crypto lender.
A Genesis bankruptcy would be a huge FTX contagion event due to the size of DCG, which has investments in over 200 crypto companies.
Concern about Genesis has also spread to DCG and GBTC – the latter holds 3.5% of all bitcoin in circulation.
In a sign of how investors’ nerves are fraying, the GBTC fund is now trading at a Discount on Net Asset Value of 42.6%, GBTC is down 75% to date.
Grayscale is doing its best to increase confidence:
Did FTX endorser Tom Brady and others engage in misrepresentation?
Elsewhere, Being Impressive Investigated by Texas Regulator With respect to the payment he received for endorsing FTX US.
Celebrities Tom Brady and Steph Curry are under investigation by the Texas State Securities Board, with the regulator looking into the nature of the disclosures and their prominence.
“We’re keeping a close eye on them,” said director Joe Rotunda.
According to lawyers, celebrities can find themselves in trouble if they endorse a product that they haven’t actually done any due diligence on, which could be considered misrepresentation.
Crypto price inefficiencies return to bring easy money back on the table
Chicago trading firms may have hundreds of millions, if not billions, of dollars in FTX trading accounts, but that doesn’t mean money can’t be made.
In fact this kind of deregulation in the markets and the mass exodus of trading desks has an effect, there are now huge opportunities to pick up low hanging fruit tins which has not been possible for a few years.
Price differentials between exchanges and even between similar assets on the same exchanges are leading to the emergence of sizable arbitrage tradesAs seen in the chart below:
“If you know what you are doing and you have the confidence to put your money on exchanges, there are very profitable places to trade,” said Chris Taylor, who runs crypto strategy at GSA Capital. Caveat Emptor – Because trading on exchanges is a big deal at the moment.
Beyond FTX – Better Trading, Better Metaverse
FTX has definitely outperformed the cryptocurrency and is likely to have a long winter. Nevertheless, even at this juncture there are profitable opportunities for savvy traders and investors.
So if you are looking to add some alpha to your portfolio, a good place to start is the pre-sale segment, and we have two interesting offers for your watchlist – dash 2 business (D2T) and robot era (Torah).
Dash 2 Trade is the perfect marketplace for the post-FTX world – its trading intelligence tools, signals and metrics will help traders and investors spot and clarify problems.
have another project robot eraWhich Could Be The Next Hot Metaverse Game – It’s Similar To The Sandbox, But Better – You Build Planets Using Robots.
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