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FTX Confirms $9B User Funds Are Missing

FTX Confirms $9B User Funds Are Missing

The collapse of the cryptocurrency exchange FTX occurred approximately four months ago. Yet, the exchange, its officials, and its clients continue to experience developments. According to a recent Wall Street Journal article, there have been $8.9 billion missing and unaccounted-for customer funds.

This is the first time the exchange has made a fund deficiency-related statistic public. In relation to the $11.6 billion in unpaid customer account balance, the exchange is said to have secured about $2.7 billion in client assets. Based on asset values when the company filed for bankruptcy in November 2022, the estimated worth of FTX’s assets and liabilities is calculated.

Before its bankruptcy, Alameda Research had borrowed almost $9.3 billion from client accounts. Alameda Research is responsible for the $8.9 billion deficit that is now present. If the money was borrowed with or without the customer’s permission, FTX did not clarify that. A financial report revealed that as of Jan. 31, the sibling business of FTX only had about $475 million in cash on hand.

John J. Ray III, the Chief Executive Officer and Chief Restructuring Officer of the FTX Debtors commented on the most recent event, saying,

“[FTX’s] books and records are incomplete and, in many cases, totally absent. For these reasons, it is important to emphasize that this information is still preliminary and subject to change.”

Hence, even if the exchange has $2.7 billion, it is impossible to predict how much compensation the impacted clients would get. Nevertheless, about $1.5 billion consists of illiquid crypto assets, such as the FTT token from FTX.

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