FTX’s balance sheet, hack paint dim picture for user recovery

A SWIFT plunge in value of FTX’s key crypto assets, along with unauthorised withdrawals of funds after it filed for bankruptcy, suggests that customers of the once popular exchange face a slim chance of recovering much of their deposits.

A breakdown of the balance sheet of Sam Bankman-Fried’s exchange shared with investors a day before its bankruptcy filing shows that it had nearly US$9 billion (RM41.38 billion) in liabilities and US$900 million in liquid assets, US$5.5 billion in “less liquid” assets, and US$3.2 billion in “illiquid” assets, according to sources familiar with the matter who viewed a limited version of information. Most of the biggest holdings, including lower-profile cryptocurrencies Serum, Solana and FTT, have since plunged in value.

Within 24 hours of the bankruptcy filing, an outflow of unauthorised crypto withdrawals — estimated at US$477 million by blockchain analytics firm Elliptic — further eroded the pile of assets available for possible customer recovery. FTX is launching an investigation with law enforcement into the suspected theft.

The balance sheet also referenced a negative US$8 billion of a “hidden, poorly internally labelled” fiat currency account and noted US$5 billion of withdrawals by users last Sunday. An accompanying note says, “There were many things I wish I could do differently than I did, but the largest are represented by these two things: The poorly labeled internal bank-related account and the size of customer withdrawals during a run on the bank.”

The balance sheet is incomplete and not granular, one source said. The Financial Times first reported on the balance sheet. Bankman-Fried didn’t respond to emailed inquiry about the balance sheet.

Here’s a breakdown of key assets listed on FTX’s balance sheet:

Serum Tokens: US$2.2 billion

The biggest asset listed on the balance sheet is US$2.2 billion of SRM, or Serum tokens. Serum price has fallen about 38% since Nov 10. Developers have since spun off the project to mitigate exposure to FTX. The market capitalisation for Serum, based on circulating supply, is about US$65 million, according to data from Coinmarketcap.

SOL Tokens: US$982 million

The balance sheet also lists assets of US$982 million in SOL, or Solana tokens. SOL fell 24% in the past two days as developers distance themselves from the FTX-backed ecosystem.

MAPS Tokens: US$616 million

The price of the MAPS token fell 25% in the past two days. The current market capitalisation for MAPS token is US$3.5 million, according to Coinmarketcap.

FTT Tokens: US$554 million

The price of FTT token, the token issued by FTX exchange, fell by 50% in the past two days.

Robinhood Shares: US$472 million

Robinhood’s stock rose 13% on Friday, meaning the asset value of Robinhood shares increased from what the balance sheet shows. However, Bankman-Fried’s holdings of Robinhood shares were under an entity called Emergent Fidelity, which is not among the entities listed in Friday’s bankruptcy filing. — BLOOMBERG