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FTX is a cryptocurrency exchange founded by Sam Bankman-Fried. Image: Shutterstock
FTX published the fourth in a series of interim financial updates on Friday showing the bankrupt cryptocurrency exchange spent a total of $86 million through the end of March, according to court documents.
The report shows the vast majority, $67 million, worth of FTX's spending went towards legal fees. The company said it has $2 billion in cash and brought in $48 million from the sale of assets. But due to the report only being current through the end of March, it does not include the $50 million FTX stands to receive from the sale of LedgerX. The company finalized its deal with M7 Holdings, LLC on April 25.
FTX CEO John Ray III, who’s been leading the company during its Chapter 11 bankruptcy proceedings, has been open about how difficult it’s been recovering funds.
"It has taken a huge effort to get this far. The exchanges' assets were highly commingled, and their books and records are incomplete and, in many cases, totally absent," he said after February’s financial report was published. "For these reasons, it is important to emphasize that this information is still preliminary and subject to change."
The $86 million in spending was dispersed across five “silos.” WRS, short for FTX's U.S.-based West Realm Shires, accounted for almost all of it FTX's spending: a total of $80.5 million. Four and a half million of the spending came from Dotcom, or FTX.com; $798,177 from Alameda; $327,548 from FTX-owned voter analytics firm Deck Technologies Inc.; and $50,000 from Ventures.
Unlike farm silos filled with grain, these silos are filled with FTX-owned companies or "debtors."
As with all of these reports, FTX noted that insider payments among debtor companies were part of normal business and “do not include any payments to the founder or their relatives.”
The March report shows a significant jump in the amount of money FTX has been able to take in since its last report for February 2023, which showed the exchange only having taken in $13.5 million. The $48 million generated from the sale of assets was primarily from FTX exiting a $45 million position in the Sequoia Capital Fund, LP. Another $3 million came from exiting an equity position in Spoak Inc., which operates the crypto accounting platform Tactic.
After filing for Chapter 11 bankruptcy protection in November 2022, the company has increased efforts to recoup funds by selling assets and positions in other companies and ventures. In March, blockchain infrastructure company Mysten Labs bought back $95 million worth of its shares and $1 million SUI tokens from FTX.
Earlier this month, FTX published a case update that showed the company has recovered $6.2 billion in assets.
"We believe it is more important to provide transparency to stakeholders by making this information public now than to wait until we can achieve certainty," Ray said.
