Investigations have been ongoing to determine the location of the $8 billion hole in FTX’s balance sheet
After Sam Bankman-Fried’s exchange, FTX went under, the entire crypto market suffered numerous losses and asset devaluations. Additionally, FTX-exposed crypto businesses received a fair portion of the unpleasant pill. The $8 billion gap in FTX’s balance sheet that resulted in the liquidity crisis has been the subject of continuing investigations.
Sam Bankman-Fried
Sam Bankman-Fried Addresses $8 Billion Balance Sheet Deficit, The Key Takeaway
The balance sheet deficit for FTX kept expanding. The company initially stated merely $2 billion before stating $5 billion. The gap has now widened to more than $8 billion.
The monies’ locations were disclosed by Sam Bankman-Fried (SBF), the former CEO of FTX, in a recent Bloomberg interview. SBF said that he displayed a different balance sheet to investors during an urgent bailout.
The study states that SBF listed $15.4 billion in less liquid assets, $9 billion in liquid assets, and $8.9 billion in debt. Illiquid assets worth $3.2 billion were also highlighted in the report. He revealed another balance sheet showing the actual situation at the time of the bailout meeting. The balance sheet bears similar numbers but $8 billion less liquid assets. SBF said he misquoted the numbers.
He continued that customers were sending money to Alameda Research rather than directly to FTX. He claimed that the sum had been double tallied by FTX’s internal audit system and attributed to both businesses.
Following SBF’s statement, the biggest cash flow was generated by FTX and Alameda Research, while Binance, a competitor, became the highest expense. He spent a total of $2.5 billion to acquire Binance’s holdings. SBF also disclosed that he spent around $1.5 billion on other expenses and $250 million on real estate. They counted $1 billion incorrectly while investing $4 and $1.5 billion in venture financing to buy other companies.
He continued that customers were sending money to Alameda Research rather than directly to FTX. He claimed that the sum had been double tallied by FTX’s internal audit system and attributed to both businesses.
Following SBF’s statement, the biggest cash flow was generated by FTX and Alameda Research, while Binance, a competitor, became the highest expense. He spent a total of $2.5 billion to acquire Binance’s holdings. SBF also disclosed that he spent around $1.5 billion on other expenses and $250 million on real estate. They counted $1 billion incorrectly while investing $4 and $1.5 billion in venture financing to buy other companies.
The FTX situation, according to most of those in the cryptocurrency industry, is a deception and not a coincidence. In his first public outing following the demise of FTX, Bankman-Fried asserted that he did not commit fraud on Wednesday. He asserted that he was ignorant of the severity of the damage and the state of FTX.
In an interview with The New York Times, SBF blamed bad accounting and management problems for the $32 billion FTX exchange’s demise. This comment sparked both civil and criminal investigations. The investigation aims to ascertain whether FTX violated any laws by lending money from its clients to Alameda Research.
John Ray III, the new CEO of FTX in charge of the company’s bankruptcy proceedings, expressed dismay at the state of affairs. In his words, Ray berated SBF for using improper management techniques and declared that he had never witnessed such a total breakdown of corporate governance.
Read more:
- Sam Bankman-Fried Claimed Only $100,000 Of Assets Left, Called To FTX Hearing By Texas Securities Regulator
- Sam Bankman-Fried Said That The FTX Was A Bet Gone Wrong