With the crypto bank Silvergate, another company got caught up in the FTX affair. The collapse of the FTX trading platform creates a slew of crypto companies that are closely intertwined in business. Some of them have gone bankrupt in recent months. A review.
Below is a selection of those companies that have provided information about their involvement with FTX or Alameda, the brokerage firm of FTX founder Sam Bankman-Fried:
Silvergate: mass layoffs, imminent bankruptcy
According to information from November 2022, clients of the crypto bank Silvergate had deposited less than 10 percent of the total of nearly $ 12 billion (currently 11.2 billion euros) in FTX deposits. There are no outstanding loans from the exchange. Investors still pulled more than $8 billion from Silvergate at the end of 2022.
The company then announced that it would cut 200 jobs. That is 40 percent of the working population. In early March 2023, Silvergate questioned its own survival due to billion-dollar losses.
Massive problems with BlockFi and Genesis
Cryptobank BlockFi filed for bankruptcy in late November 2022 after suspending customer withdrawals weeks earlier. BlockFi was in trouble months earlier and was set to be acquired by FTX for up to $240 million. In addition, the crypto exchange BlockFi had provided a loan of USD 400 million.
BlockFi rival Genesis also filed for bankruptcy protection for some companies in January 2023. In order to maintain liquidity, he had stopped lending and paying to customers in recent months, and according to media reports, he hired a restructuring consultant and laid off much of the workforce. According to Genesis, $175 million is on fire related to the collapse of the FTX.
Binance has called off the acquisition of FTX at short notice
Binance boss Changpeng Zhao had fueled investors’ doubts about FTX’s business dealings in November when he announced the sale of FTT, digital FTX shares (“tokens”). In addition, Binance, the world’s largest crypto exchange, called off a short-term rescue of the struggling rival. Customers of the market leader have also occasionally cleared their accounts. In mid-December 2022, Changpeng gave it all-clear.
Celsius & Voyager filed for bankruptcy for FTX
The crypto bank Celsius went bankrupt months before the bankruptcy of FTX. According to court documents, Celsius brokerage firm Alameda made about $1 billion in loans between 2020 and 2022.
Like rival Celsius, Voyager collapsed for FTX. FTX wanted to temporarily take over assets from the crypto bank with a volume of USD 1.42 billion.
Coinbase losses relatively small
Crypto exchange Coinbase said it had deposited $15 million into FTX accounts. There are no obligations in FTT or Alameda. Coinbase also did not extend loans to competitor FTX.
According to the information, the wealth management company CoinShares, which specializes in crypto assets, is threatened with a loss of up to $30.3 million from transactions with FTX. CoinShares is financially healthy, emphasizes company boss Jean-Marie Mognetti.
Crypto.com announced in November 2022 that the Singaporean Crypto.com exchange had temporarily transferred approximately $1 billion in FTX. At the time of the rival’s collapse, the pledge was less than $10 million.
On November 9, 2022, a day after FTX froze withdrawals, financial services company Galaxy Digital valued its exposure to the crypto exchange at $76.8 million. Of that, $47.5 million was “withdrawn,” Galaxy Digital added at the time.
Hedge fund Galois can’t get his money
About $100 million, or about half of hedge fund Galois’ money, is tied up in FTX accounts, according to the Financial Times. Other media reports spoke of $45 million.
According to its own statements, the Kraken trading platform owns about 9000 of the FTX tokens FTT and is “in no way” affected by the collapse of its competitor. In early November, the value of this FTT stock was about $200,000; it is currently about $13,000.
Asset manager and provider of the world’s largest Bitcoin fund, Grayscale Bitcoin Trust (GBTC), emphasizes that the current industry turmoil has not impacted product performance or asset safety.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
