LedgerX, FTX Group's solvent subsidiary that also had to file for bankruptcy protection as part of the group, will make available $175 million for use in bankruptcy proceedings, Bloomberg reported Wednesday, citing people with knowledge of the matter.
The money could be transferred as soon as today and comes from a $250 million fund that LedgerX had set aside, as it aimed to get regulatory approval to clear crypto derivatives trades without intermediaries, per the report. LedgerX withdrew its application with the US Commodity Futures Trading Commission (CFTC) as FTX Group filed for bankruptcy on Nov. 11. FTX US had acquired LedgerX last year and rebranded it to FTX US Derivatives.
A CFTC spokesperson told Bloomberg that the agency is aware of a planned transfer. The transferred money could reportedly be used to repay FTX's creditors. The FTX Group has more than a million total creditors, a recent court filing indicated. The group currently has a combined cash balance of $1.24 billion, which is far below the $3.1 billion it owes its top 50 creditors.
FTX Group collapsed earlier this month amid a sudden liquidity crisis. The crypto exchange operator reportedly tapped customer assets to fund risky bets by its affiliated trading firm, Alameda Research, setting up its implosion.
CFTC chair Rostin Behnam is slated to testify about the FTX collapse in a US Senate committee hearing on Thursday.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
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