The entire crypto market bled with multiple losses and asset devaluation after the collapse of Sam Bankman-Fried\u2019s crypto exchange FTX. In addition, crypto firms exposed to FTX got a fair share of the bitter pill.<\/p>\n
Investigations have been ongoing to determine the location of the $8 billion hole in FTX\u2019s balance sheet, which caused the liquidity crunch.<\/p>\n
The deficit in FTX\u2019s balance sheet kept growing. The firm initially declared only $2 billion and later said it was $5 billion. The hole has now grown to over $8 billion.<\/p>\n
In a recent Bloomberg interview, Sam Bankman-Fried (SBF), FTX former CEO, revealed the whereabouts of the funds. SBF said he showed investors a separate balance sheet at an emergency bailout.<\/p>\n
According to the report<\/a>, SBF listed $8.9 billion in debt, $9 billion in liquid assets, and $15.4 billion in less liquid assets. The report also mentioned $3.2 billion in illiquid assets.<\/p>\n 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.<\/p>\n He added that customers were transferring money to Alameda Research instead of sending it directly to FTX. According to his statement, FTX\u2019s internal audit system double-counted the amount and credited it to both firms.<\/p>\n Following SBF\u2019s statement, FTX and Alameda Research had the highest cash flow, but Binance, a rival, became the highest expense. He paid a net amount of $2.5 billion to buy out Binance\u2019s investments. SBF also revealed that he spent $250 million on real estate and about $1.5 billion on other expenses.<\/p>\n Some $4 billion and $1.5 billion went into venture capital investments to acquire other firms, while they counted $1 billion by mistake.<\/p>\n The report also stated that SBF and the remaining employees spent the previous weekend attempting to raise funds. The funds are to fill the $8 billion hole in FTX\u2019s balance sheet and repay customers.<\/p>\n Meanwhile, most people in the crypto space say the FTX crisis is a fraud and not an accident. On Wednesday, during his first public appearance after the collapse of FTX, Bankman-Fried insisted<\/a> that he did not commit fraud. He claimed that he was unaware of the extent of damage and what was going on with FTX.<\/p>\n In an interview with The New York Times, SBF blamed the collapse of the $32 billion FTX exchange on poor accounting and management failures. This comment triggered civil and criminal investigations. The investigation aims to determine whether FTX committed a crime by lending customers\u2019 funds to Alameda Research.<\/p>\n Cryptocurrency market records new gains | Source: Crypto Total Market Cap on TradingView.com<\/p>\n However, FTX\u2019s new CEO, John Ray III, in charge of the firm\u2019s bankruptcy proceeding, expressed disgust at the situation. In his words, Ray said he had never seen such a complete failure of corporate control, condemning SBF for unacceptable management practices.<\/p>\n Featured image from Texas Tribune, chart from TradingView.com<\/p>","protected":false},"excerpt":{"rendered":" <\/p>\n The entire crypto market bled with multiple losses and asset devaluation after the collapse of Sam Bankman-Fried\u2019s crypto exchange FTX. In addition, crypto firms exposed to FTX got a fair share of the bitter pill.<\/p>\n Investigations have been ongoing to determine the location of the $8 billion hole in FTX\u2019s balance sheet, which caused the liquidity crunch.<\/p>\n The deficit in FTX\u2019s balance sheet kept growing. The firm initially declared only $2 billion and later said it was $5 billion. The hole has now grown to over $8 billion.<\/p>\n In a recent Bloomberg interview, Sam Bankman-Fried (SBF), FTX former CEO, revealed the whereabouts of the funds. SBF said he showed investors a separate balance sheet at an emergency bailout.<\/p>\nSam Bankman-Fried Reveals Conflicting Balance Sheets<\/h2>\n
Cause of FTX Collapse: Fraud Or Mismanagement?<\/h2>\n