FTX cryptocurrency exchange spends $86 million through March, majority on legal fees

FTX, the cryptocurrency exchange that filed for Chapter 11 bankruptcy protection in November 2022, has published its fourth interim financial update, which reveals that it spent $86 million through the end of March. Court documents show that $67 million of FTX’s spending went towards legal fees, while the company has $2 billion in cash and brought in $48 million from the sale of assets.

However, it is worth noting that the report only covers the period through the end of March and does not include the $50 million FTX stands to receive from the sale of LedgerX, as the deal with M7 Holdings, LLC was finalized on April 25.

FTX CEO John Ray III has been open about the difficulties the company has faced in recovering funds, stating that “it has taken a huge effort to get this far. The exchanges’ assets were highly commingled, and their books and records are incomplete and, in many cases, totally absent.”

The $86 million in spending was dispersed across five “silos,” with WRS, short for FTX’s U.S.-based West Realm Shires, accounting for almost all of it FTX’s spending. Four and a half million of the spending came from Dotcom, or FTX.com; $798,177 from Alameda; $327,548 from FTX-owned voter analytics firm Deck Technologies Inc.; and $50,000 from Ventures.

The March report shows a significant jump in the amount of money FTX has been able to take in since its last report for February 2023, which showed the exchange only having taken in $13.5 million. The $48 million generated from the sale of assets was primarily from FTX exiting a $45 million position in the Sequoia Capital Fund, LP.

Since filing for bankruptcy, FTX has increased its efforts to recoup funds by selling assets and positions in other companies and ventures. In March, blockchain infrastructure company Mysten Labs bought back $95 million worth of its shares and $1 million SUI tokens from FTX.

FTX has also recovered $6.2 billion in assets, according to a case update published earlier this month. Ray believes it is important to provide transparency to stakeholders by making this information public now rather than waiting until certainty is achieved.

Overall, FTX’s fourth interim financial update sheds light on the company’s efforts to recover from bankruptcy, including the significant legal fees it has incurred, as well as its successful asset sales and recoveries.

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