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Zane Tackett, former head of Institutional sales at FTX shared details from FTX’s balance sheet
As per the information shared by Tackett, the liabilities of FTX are $8.8 billion
This is against liquid holdings of $900 million and nearly $5.2 billion in other assets
On November 11 Zane Tackett, former head of Institutional sales at FTX, shared details from the crypto exchange’s balance sheet.
As per him, the liabilities of FTX are $8.8 billion. At the same time, it held liquid assets worth $900 million, which includes USD, JPY, and DAI. The less liquid assets were worth $2.037 billion, which included GBTC, ETHE, and SOL. The company’s Illiquid assets were worth $3.2 billion, including long-term equity investments.
This was against a liquid hole of $7.9 billion and an illiquid hole of $2.66 billion. Although, Tackett did clarify that these are estimated figures that he viewed on the exchange’s balance sheet.
He further wrote,
There’s no way to paint a pretty image out of these numbers, but when I saw the balance sheet this evening i thought it was going to be much worse. Now, granted, there’s a massive hole in liquid assets, there is a pretty big chunk of change in the ventures portfolio.
Moreover, the former employee asked users’ opinions on two options that FTX could take going forward. For option one, he suggested bankruptcy proceedings and going the legal way. Although he added that the hack and eventual demise of Mt Gox saw users losing millions of dollars in Bitcoin. However, eight years on, users have yet to see a penny from it. He added that “lawyers, accountants, and tons of others all take their cut from the creditors throughout this slow, long, brutal process.”
FTX Clients Wanted Tokenization
Notably, for option two he said that users’ funds could be tokenized and issued to them to be redeemed at a later date. If nothing else, a token will provide the users with immediate liquidity on their remaining assets which alone makes it superior to option one, he said.
5/ I don't know what the token model for something like this would look like as instead of merely representing debt, there's the added aspect of existing but illiquid assets that would need to be taken into consideration. Luckily i know a guy who has some expertise @PhilGPotter
— Zane Tackett (@tackettzane) November 11, 2022
Furthermore, as per Tackett, a number of FTX large clients that he spoke with in the past few days voiced their interest in exploring a token model to address the shortfall. Further, he said that these clients stated that it would be heavily favored over any bankruptcy procedures.
Nonetheless, crypto Twitter appeared divided over the two routes that FTX could take. Nevertheless, tokenization appeared to be the favored choice for users, as it would eliminate a legal battle. For instance, a Twitter user named Arthur said,
B is the clear option. Bankruptcy only ends up benefiting lawyers, accountants etc and victims will see very little at end of process after a long and torturing process.
Bankruptcy procedure is probably the worst option for people with funds on FTX.Takes forever, has a shitton of middlemen and people who'll try to have a cut of it, will fully doxx everyone, etc.
Any other option is probably better.
— Tree of Alpha (@Tree_of_Alpha) November 11, 2022
Although, it appears that the users’ preference was not considered as FTX filed for bankruptcy at the time of writing. FTX, FTX.us, Alameda, and 130 other companies affiliated with the FTX Group filed for Chapter 11 bankruptcy in the US today after a week of chaos and uncertainty.