FTX Holds $1.24B In Cash Reserves: Bankruptcy Filing
- FTX Group has a total cash reserve of around $1.24 billion and this is not enough to pay off even the top 50 creditors of the firm to which it currently owes close to $3.1 billion, as per a previous filing.
- A filing submitted late Monday by FTX Group’s proposed financial advisor Alvarez & Marsal North America LLC displays an updated summary of the group’s cash balances as of Nov. 20.
- Bankman-Fried’s parents, who were senior directors at the firm, had purchased at least 19 properties worth nearly $121 million in the Bahamas over the past two years.
The now disgraced crypto trading entity FTX Group has a total cash reserve of around $1.24 billion, which is nearly not enough to pay off the millions of creditors that the crypto trading firm currently has. This is a small amount when compared to the $8-$10 billion hole in the firm’s balance sheet, and it seems that the chances of redemption of the firm to its former glory are next to zero.
On Nov. 11, the crypto sector witnessed one of the biggest declarations of bankruptcy protection under Chapter 11 and it came from Sam Bankman-Fried, also known as SBF in the volatile industry, who is the founder and former CEO of FTX, an exchange whose value was $32 billion prior to its collapse a few weeks earlier following a funding round that happened in 2021 led by Softbank and Sequoia Capital.
A filing submitted late Monday by FTX Group’s proposed financial advisor Alvarez & Marsal North America LLC displays an updated summary of the group’s cash balances as of Nov. 20. The document stated that the latest figures are “substantially higher cash balances than the Debtors were in a position to substantiate as of Wednesday, Nov. 16.”
Additionally, the FTX Group’s cash reserves were divided into four silos — the Alameda silo, dotcom silo, ventures silo and West Realm Shires (WRS) silo — and also include the cash that belong to their debtors as well as non-debtor entities. It was confirmed that close to $751 million is held in debtor entities while the remaining $488 million belongs to non-debtor entities.
The FTX Group currently owes around $3.1 billion to its top 50 creditors and it may have more than a million total creditors as per another previous filing. While the list did not include the names of the creditors, its top 10 creditors come in at just under $1.45 billion. As reported earlier by Bitnation, the now-disgraced crypto exchange FTX, founded by Sam Bankman-Fried, was already in dire states before it was confirmed that the Bahamas-based firm had collapsed with over $9 billion in liabilities.
“From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented,” new CEO of FTX, John J. Ray III, who is a Chicago-based attorney known for overseeing the liquidation of Enron, said following the collapse of the firm.
In the light of similar events, Reuters reported that the parents of Bankman-Fried, who were also senior executives of the failed cryptocurrency exchange, had purchased at least 19 properties worth nearly $121 million in the Bahamas over the past two years.