$8.9 Billion Missing: What Happened to FTX’s Crypto Empire?
Summary of FTX: $8.9 Billion Customer Funds Missing – Here’s What Happened
- FTX uncovered a „massive shortfall“ in crypto and fiat currency holdings, with a net deficit of $8.6 billion.
- Alameda Research borrowed around $9.3 billion from customer accounts before the bankruptcy.
- The books and records are incomplete or totally absent due to inadequate record-keeping practices.
FTX has revealed that it had a „massive shortfall“ in both crypto and fiat currency holdings, with a net deficit of $8.6 billion. The exchange only had $694 million in liquid assets, while Alameda Research reportedly borrowed around $9.3 billion from customer accounts before the bankruptcy. This is the second presentation by FTX’s new management since the collapse rocked the crypto space taking down several major firms associated with Sam Bankman-Fried’s fallen empire along with it. For some reason, the FTX token (FTT) still trades above $0 at $1.26 despite all these losses incurred by its former customers.
Inadequate Record Keeping
John J Ray III, chief restructuring officer and CEO of FTX stated that books and records were incomplete or totally absent due to inadequate record-keeping practices by prior management which caused this massive shortfall in funds held by both FTX and its US subsidiary FTX US. He further stressed on how assets between FTX and Alameda Research were highly commingled making it harder for them to uncover more facts about this situation as they progress through their investigation into what happened to these missing funds.
Why You Should Care
A transparent bankruptcy proceeding is crucial if former customers wish to maximize their chances of recovering some funds back from their investments made through Sam Bankman-Fried’s crypto empire. It is evident that Anthony Scaramucci’s ties to FTX have been severed following the collapse as well as many other Wall Street investors who were interested in investing large amounts into this venture but backed out due to lack of transparency regarding how these funds would be utilized for gains rather than losses within such a short span of time after launch as was seen here with these missing customer funds debacle.