Bankrupt Crypto Exchange FTX Has Cash Balance of Over $1 Billion

Samuel Bankman-Fried, founder and former CEO of FTX, testifies on Capitol Hill in Washington, on Feb. 9, 2022. Saul Loeb/AFP via Getty Images

Bankrupt crypto exchange FTX has a cash balance in excess of $1 billion, according to a new filing by the company.

The latest tally “identifies substantially higher cash balances than the debtors were in a position to substantiate as of Wednesday, Nov. 16,” the filing states, according to Bloomberg. In total, FTX is reported to have $1.24 billion in cash balance. While $751 million of the cash balance is held in debtor entities, the remaining $488 million is with non-debtor entities.

Roughly $514 million is in unrestricted cash, while $465 million is in restricted cash that can only be used for specific purposes, like repayment of loans. In addition, $260 million is custodial, according to CoinDesk.

The largest reserve of cash is at Alameda Research, co-founded by FTX founder Sam Bankman-Fried, which holds $393 million. FTX Japan held $171 million.

The cash balance of $1.24 billion is far lower than the $3.1 billion the company owes to its top 50 creditors. The top three creditors alone are owed more than $500 million.

In total, the company estimates that over a million creditors might be affected by the bankruptcy. At least 101 firms are part of the bankruptcy proceedings.

FTX was forced to file for Chapter 11 bankruptcy after concerns about the company’s balance sheet triggered a run on its deposits, which led to a liquidity crisis. The collapse of the crypto exchange has affected numerous big investors, including American pension funds.

The Missouri State Employees’ Retirement System, for example, is estimated to have lost $1 million on its investment in FTX. The Pennsylvania Public School Employees Retirement Fund reportedly had an indirect exposure to FTX to the tune of $5 million.

Bankruptcy Proceedings

In a news release on Nov. 19, FTX announced that it had launched a strategic review of its global assets. According to the review, many regulated or licensed FTX subsidiaries, both within and outside the United States, have “balance sheets, responsible management, and valuable franchises,” the company’s CEO John Ray said.

Ray replaced Sam Bankman-Fried as FTX CEO and is overseeing the firm’s bankruptcy proceedings. He is prioritizing the preservation of franchise value “as best we can” in such difficult circumstances.

“It will be a priority of ours in the coming weeks to explore sales, recapitalizations, or other strategic transactions with respect to these subsidiaries, and others that we identify as our work continues,” he added.

In a recent interview with CNBC, Bankman-Fried said that there are billions of dollars in customer assets in jurisdictions where there were “segregated balances.” In addition, there are “billions of dollars of potential funding opportunities” to make customers whole.

Venture capital investors told the media outlet that the former FTX CEO has been contacting them in hopes of securing funding.