Crypto exchange FTX reveals an $8.8 billion shortfall in client funds. A presentation published Thursday on law firm Kroll’s website shows that exchange managers were only able to find about $2.8 billion of the $11.6 billion that should be in client accounts.
The value of FTX’s assets and liabilities is as of the day the company filed for bankruptcy in early November. Managers have identified and inventoried virtually every wallet associated with the FTX.com and FTX US exchanges.
According to the presentation, about $413 million more accounts for receivables from both sites. However, this amount may include blocked accounts and accounts whose owners could not be identified.
At the same time, it is unclear whether clients will be able to recover the entire amount of $2.8 billion that FTX found, since about $1.5 billion of these funds are illiquid crypto assets, the value of which has fallen significantly since the exchange crash. Of these, $1 billion is stored in the MAPS (MAPS) cryptocurrency, $130 million – in the native token of the FTT exchange, $157 million – in Serum (SRM).
At the same time, most of the total shortfall in FTX can be attributed to Alameda Research, which borrowed $9.3 billion from customer accounts before the exchange went bankrupt. The presentation states that this amount is taken into account on the balance sheet of the exchange in accounts payable and receivable of individuals and companies associated with the FTX group.
In 2022, Alameda failed to meet its loan obligations, according to an SEC investigation, and FTX CEO Sam Bankman-Fried directed billions of dollars of the exchange’s client assets to be transferred to Alameda to ensure that Alameda maintains relationships with creditors and access to their money.