New managers at FTX, helmed by restructuring officer John J. Ray III, have recently revealed that $8.9 billion worth of customer funds have been unaccounted for and have gone missing. This marks the first time the managers have disclosed how much of customers’ funds have gone missing from the bankrupt cryptocurrency exchange.
$2.7 Billion of Customers Assets Recovered
According to a report by the Wall Street Journal (WSJ) that cited a public presentation released on Thursday, the managers identified roughly $2.7 billion worth of customer assets against $11.6 billion of balances outstanding on customer accounts.
The estimated value of the FTX’s assets and liabilities is based on crypto prices on November 11, when the cryptocurrency exchange filed for Chapter 11 bankruptcy protection.
Although the exchange has identified approximately $2.7 billion, it remains unclear how much compensation affected customers will receive from that amount.
The managers stated that about $1.5 billion of that recovered fund included illiquid crypto assets like FTX’s native token, FTT, which has lost more than 90% of its value since the exchange’s collapse.
Moreover, around $880 million of that fund are “liquid currencies” such as dollars, stablecoins, bitcoin (BTC), or ether (ETH). Additionally, approximately $400 million in assets that FTX has found are in other receivables, according to the managers.
Is Almeda Responsible for the Shortfall?
Meanwhile, a large portion of the $8.9 billion shortfall can be attributed to FTX’s sister company Alameda Research, which borrowed $9.3 billion from customers’ accounts before the exchange’s bankruptcy filing.
FTX did not reveal whether some or all of the $9.3 billion was borrowed without customers’ consent. However, the exchange stated that Alameda only had roughly $475 million in cash in its accounts as of January 31.
Commenting on the development, John J. Ray III, the new CEO and Chief Restructuring Officer of the FTX Debtors, said:
“[The exchange’s] books and records are incomplete and, in many cases, totally absent,” said Mr. Ray in a statement. “For these reasons, it is important to emphasize that this information is still preliminary and subject to change.”
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