FTX has no record of any part of FTX client funds. The platform said that of the $11.6 billion in outstanding balances on customer accounts, only $2.7 billion have been identified. This means that $8.9 billion in client assets are untraceable. This shortfall could be attributed to Alameda Research fraudulently borrowing funds from FTX clients.
Huge loss in FTX client accounts
While customers of FTX are waiting to be reimbursed, the platform is struggling to find traces of all customer funds blocked since last November. According The Wall Street Journal, FTX announced that it had recovered $2.7 billion in client funds. Yet the FTX’s outstanding accounts receivable balance is in the order of $11.6 billion. It means that $8.9 billion of FTX customers simply disappeared.
However, the current CEO of FTX urges caution and patience. John J. Ray indicates that the FTX books are incomplete. Current information could therefore change if new books are found. Moreover, the estimated value of FTX’s assets and liabilities is based on asset prices in November 2022 when the platform collapsed.
Books and records [de FTX] are incomplete and in many cases completely missing. For these reasons, it is important to emphasize that this information is still preliminary and subject to change.
John J. RayCEO of FTX
It’s not the first time that FTX communicates on the deficit of customer funds. In view of the information provided, the refund of FTX client funds is not coming soon…
Alameda Research at the root of the deficit?
FTX claims not to be able to explain the important deficit of $8.9 billion… However, the suspicions of several observers point towards Alameda Research. In effect, Alameda Research had borrowed about $9.3 billion from FTX before the bankruptcy.
The money borrowed by Alameda Research came from customer funds as revealed Nishad Singh. The former Director of Engineering of FTX recently confessed to obtain leniency from the court. Released on bail of $250,000, Singh said he was ready to cooperate with justice. For its part, Sam Bankman, the ex-CEO of FTX SBF continues to claim his innocence.
While FTX customers have already found their funds in Japan, the significant shortfall in customer funds makes the prospect of possible reimbursement of customer funds in other states less likely. For now, FTX customers should continue to register with the New York Attorney’s Office and exercise caution so as not to be scammed.
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