FalconX says balances locked on the collapsed exchange FTX represented 18% of unencumbered cash equivalents.
The cryptocurrency trading firm FalconX has admitted that the demise of FTX cost it money. However, the company added that this ratio fell well within their counterparty exposure limits.
The company stated that its assets locked on FTX represent only 18% of its “unencumbered cash equivalents.” In spite of its exposure to the now bankrupt FTX, FalconX asserted that its finances are sound because it is still facilitating “billions of dollars” in daily transaction volume for its clients. Additionally, the business asserted that its monthly volume had increased by “80%+ month-over-month.”
“In a 0% recovery scenario of FTX balances, FalconX remains one of the best-capitalized firms in digital assets,” the company said, adding that it was “highly liquid” with a 4% debt-to-equity ratio and with over 80% of its balance sheet in regulated United State banks. FalconX said it had no exposure to Genesis, Alameda Research, or BlockFi despite sustaining losses in the FTX crash.
Since FTX was abruptly shut down, some cryptocurrency businesses have minimized their connection to the bankrupt exchange, while others have been exposed for deceiving their investors and customers about the effects of the collapse.
BlockFi filed for Chapter 11 bankruptcy on November 28 after originally denying that the majority of its assets were held in custody on FTX. Due to Orthogonal Trading’s alleged financial deception after the demise of FTX, Maple Finance, a blockchain-based institutional capital marketplace, severed all ties with it on December 5. Orthogonal Trading had been “functioning while functionally insolvent,” according to Maple Finance.
