Galaxy Digital, the technology-driven financial services and investment management firm helmed by billionaire investor Mike Novogratz, revealed on Wednesday that it has $76.8 million exposure to troubled cryptocurrency exchange FTX. The revelation was made in Galaxy’s Q3 earnings report.
Galaxy to Cut Its Exposure to FTX
Per the report, Galaxy is cutting down its exposure to FTX as $47.5 million of the aforementioned amount is currently “in the withdrawal process.”
Galaxy’s decision comes on the heels of recent reports that Binance has signed a non-binding agreement to acquire FTX following the latter’s liquidity crisis.
Galaxy Records $68M Net Loss in Q3 2022
Galaxy said it saw a net comprehensive loss of $68.1 million for the quarter, compared to a $517.9 million gain in Q3 2021. The company said the losses were attributed to the reduced valuation of its investments due to extreme market conditions.
The company also reported preliminary assets under management (AUM ) of nearly $2 billion for the quarter, a 17% rise from Q2 2022. The investment firm said it retained $1.5 billion in liquidity, including over $1 billion in cash for the third quarter.
According to the report, Galaxy mining business Galaxy Mining (GM) incurred a net comprehensive loss of $34.9 million for the quarter, triggered by “non-cash operating impairments of mining assets.”
The report stated that the company’s partner’s capital was at $1.8 billion at the end of the third quarter, down 12% from $2 billion in Q3 2021.
Galaxy now has 152 investments across 107 portfolio companies as of the end of Q3 2022, the report stated.
“While our industry continues to face macroeconomic headwinds and structural evolution, Galaxy remains focused on building for the future state of institutional adoption by taking deliberate steps to transform and simplify our operations,” Michael Novogratz, Founder and CEO of Galaxy Digital said.
Galaxy Pursues U.S. Listing
In its latest earnings report, Galaxy also revealed its intention to reorganize, become a Delaware-incorporated company and subsequently list on Nasdaq.
The New York-based company said that “upon completion of ongoing SEC review and subject to stock exchange approval,” the listing is expected to happen next year.
