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Summary
Today (January 17th, 2023), Sullivan & Cromwell (S&C) released some more information about FTX US. Some of this information was extremely helpful. They gave substantially more information on the assets that FTX US holds!
Some of what S&C released is extremely misleading. In particular, they write: “The assets identified as of the Petition Date are substantially less than the aggregate third-party customer balances suggested by the electronic ledger for FTX US.” And in a presentation, they said “Investigation has confirmed shortfalls at both International and U.S. Exchanges”.
These claims by S&C are wrong, and contradicted by data later on in the same document. FTX US was and is solvent, likely with hundreds of millions of dollars in excess of customer balances.
In the presentation that S&C formally filed on the Delaware Chapter 11 court docket, S&C failed to include $428m in FTX US’s bank accounts as an asset:
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$181m of digital assets, not including $428m USD in banks
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More than $181m of customer balances, including USD
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Thus, they concluded that FTX US had a “shortfall”
Later in the same report, S&C reveals that FTX US has an additional $428m USD in bank accounts, on top of the $181m of tokens—for roughly $609m of total assets.
Customer balances are likely around $199m, and certainly less than $497m (which they were a day earlier before massive withdrawals).
Thus FTX US had at least $111m, and likely around $400m, of excess cash on top of what was required to match customer balances.
Click here for full details.
