Since FTX was approved to sell its cryptocurrency assets in September last year, wallets associated with FTX have frequently transferred funds to other exchanges and unlocked billions of dollars worth of cryptocurrency collateral from pledging platforms. Bloomberg recently reported that the bankrupt exchange FTX has liquidated a large amount of cryptocurrency assets in preparation for potential restructuring plans.
The report cited bankruptcy operating reports from four subsidiaries of the FTX Group. According to data from December 2023, the company’s advisors sold a large amount of cryptocurrency assets, increasing the company’s cash reserves from $2.3 billion in July to $4.4 billion.
The four institutions include FTX Trading, Alameda Research, West Realm Shires Inc, and Clifton Bay Investments. West Realm Shires is the holding company of FTX’s subsidiary FTX.US in the United States, while Clifton Bay Investments is one of the many companies invested by FTX Ventures, the venture capital department of FTX.
In fact, FTX’s cash reserves have continued to increase after entering January 2024. According to a previous report by Zombit, after GBTC successfully transformed into a spot ETF, FTX sold all of its GBTC shares and exchanged them for nearly $1 billion in cash reserves. This means that FTX’s current cash reserves may have exceeded $5.4 billion.
However, despite significant progress in recovering the value of liquid assets, some creditors are planning to challenge the estimation method for their compensation due to significant differences between the current value of cryptocurrency assets and the price at the time FTX filed for Chapter 11 bankruptcy. They seek to renegotiate the valuation method for the debts.
