The fallout from FTX’s spectacular collapse last week continues to echo through crypto markets as officials probe mysterious withdraws and pick through the failed exchanges complicated balance sheet.
Bitcoin prices steadied in overnight trading, while a host of digital coins and blockchain-related tokens shed billions of value alongside it, as the cryptocurrency word continues to pick through the wreckage of FTX’s spectacular collapse from late last week.
Bloomberg reported that Sam Bankman-Fried, the 30-year old founder of the FTX exchange, was questioned by Bahamian authorities over the weekend as regulators and law enforcement from around the world seek an answer into the group’s rapid spiral, which took it from the world’s second-largest crypto exchange with an estimated value of around $32 billion to essentially worthless in less than five days.
The U.S. Securities and Exchange Commission, as well as the U.S. Department of Justice, are both reported to have launched probes into the FTX collapse, which was compounded by news that $500 million went missing from FTX’s accounts on Saturday — a day after it filed for Chapter 11 bankruptcy protection in Delaware — with authorities unsure if the funds were stolen by hackers or misappropriated by FTX executives.
The Wall Street Journal also reported that the U.S. attorney’s office for the Southern District of Manhattan is investigating the FTX collapse, and plans to focus on allegations that customer funds from the trading platforms were used to back risky bets made by Alameda Research, the hedge fund founded by Bankman-Fried.
London’s Financial Times posted details of FTX’s balance sheet the day before it sought Chapter 11 protection under newly-appointed CEO John Ray, with the data indicating just $900 million in liquid assets against more than $9 billion in overall liabilities.
The largest of the liquid assets, interestingly, was a $200 million U.S. dollar cash balance held within Alameda. The report also noted that a $472 million holding in Robinhood Markets (HOOD) – Get Free Report was held in a separate account, controlled only by Bankman-Fried, which was not included in Friday’s Chapter 11 filing.
Robinhood shares were marked 4.8% lower in pre-market trading to indicate an opening bell price of $9.97 each. Coinbase Global (COIN) – Get Free Report shares, meanwhile, were marked 2.5% lower at $56.00 each.
Crypto.com, one of the world’s biggest digital token exchanges, was also scrambling to reassure customers following a weekend report from the Wall Street Journal that suggested a wave of outflows from the platform amid questions over an unexplained transfer of around $400 million in ether last month.
CEO Kris Marszalek told a YouTube livestream Monday that the exchange will published audited accounts in the coming weeks that prove it has enough reserves to match deposits, adding the group had only a small amount of exposure to FTX.
Bitcoin, the world’s biggest cryptocurrency, was marked 1.68% higher Monday and changing hands at $16,777.53 each, clawing back some of the 23% it shed last week amid the rapid FTX decline.
Serum, the digital token created by FTX and Bankman-Fried — and allegedly the largest asset on its balance sheet and valued at $2.2 billion — was marked 5.3% lower at $25 cents each representing a market cap of just $65 million.