FTX Users Owe $1.6B in Bitcoin Debt, but Only $1M Available
It is not yet time to end the massive controversy surrounding the balance sheet of the defunct FTX cryptocurrency exchange. A crypto analyst on Twitter made a startling discovery when he pointed out that even though FTX owes its clients a whopping $1.6 billion worth of Bitcoin (BTC), the company only has $1 million worth of Bitcoin in its control at the moment.
FTX’s balance sheet blunder: Bitcoin shortage crisis
The disturbing information became public knowledge when an examination of the FTX balance sheet revealed a significant shortage in the total amount of Bitcoin owned by the exchange, which is now out of business.
The analyst also offered a rough breakdown of the data, which revealed that the exchange had $3.5 billion in coins that are believed to be liquid, $1.7 billion in cash, and $800 million in illiquid assets. To summarize, FTX is said to have a total of $5.5 billion in ostensibly liquid assets and approximately $11.5 billion in customer liabilities.
The revelation has caused shockwaves to spread across the cryptocurrency sector. Many industry experts are now wondering how FTX could have gotten into such a precarious financial condition in the first place.
FTX creditors fight back against Grayscale’s management fees
The FTX sibling company, the hedge fund Alameda Research, initiated legal action against the asset management Grayscale Investments on Friday as part of its ongoing attempts to recover assets owed to FTX creditors. According to the creditors of FTX, Grayscale was prohibiting stockholders in Grayscale’s Bitcoin and Ethereum Trusts from redeeming their shares and demanding high management fees.
The plaintiffs sought the court to intervene and assist them in realizing a value for their assets higher than a quarter-billion dollars, which would benefit FTX debtors, clients, and lenders. This would also free up at least $9 billion in value for the trusts’ stockholders. Grayscale, on the other hand, replied to the claims by calling the Alameda complaint.
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