Bankrupt FTX, the once-prominent crypto exchange, has made significant strides in bolstering its cash reserves, amassing a total of $4.4 billion by the close of 2023.
This remarkable increase represents almost double the $2.3 billion it had on hand at the end of October, as detailed in Chapter 11 monthly operating reports.
Reports by Bloomberg have revealed that the bankruptcy administrators of FTX successfully liquidated its crypto assets, yielding $1.8 billion in proceeds just last month.
It is important to note that this calculation only takes into account the four largest affiliates, which include FTX Trading Ltd and Alameda Research LLC.
Therefore, the total figure may potentially be even higher when all affiliates are considered.
To mitigate its risks, FTX engaged in trading derivatives to hedge its exposure related to its digital asset holdings, ultimately earning additional yield during these challenging times.
FTX’s downfall occurred in November 2022 when its Founder and former Chief Executive, Sam Bankman-Fried, was convicted on seven counts of fraud, conspiracy, and money laundering, awaiting sentencing for his illicit activities.
As news of these legal troubles surfaced, FTX faced a deluge of customer withdrawal requests that it could not fulfill, primarily due to liquidity constraints and its eventual collapse.
While progress is being made towards recovery, questions surrounding the distribution of funds to customers and creditors remain unanswered.
An amended reorganization plan was submitted last month, but it lacked specific details on how claimants would receive their share of the proceeds from the defunct exchange.
However, earlier filings have indicated that billions of dollars will be repaid to customers and creditors, with murmurs about the potential reopening of the FTX crypto exchange, though no official plan has been presented thus far.
Furthermore, FTX’s management has secured court approval to sell four of its subsidiaries, which were claimed to have operated independently from the troubled parent company.
Among these sales was the disposal of its crypto derivatives exchange subsidiary, LedgerX, to M7 Holdings, an affiliate of Miami International Holdings, for a sum of $50 million.
This step marks a strategic move to further streamline FTX’s operations as it navigates its path to recovery and repaying its stakeholders.