LedgerX is one of the few remaining parts of FTX’s collapsed empire, now preparing to turn its $175 million into FTX’s “bankrupt assets.”
FTX acquired LedgerX last year and changed its name to FTX US Derivatives. According to the report, the transfer money was extracted from a $250 million fund that LedgerX set aside for bidding. Specifically, the company asked for the right to conduct Derivative transactions without intermediaries, but LedgerX had to withdraw its application from the CFTC after the bankruptcy declaration of FTX and more than 130 subsidiaries in the network on November 11.
LedgerX’s transfer of assets will provide FTX with a new source of funds to use for debt repayment obligations. FTX currently has more than 1 million creditors, with a total existing cash balance of $1.24 billion, which is too low compared to the $3.1 billion it owes to its top 50 creditors.
Since declaring bankruptcy, new CEO John J. Ray III and his advisers struggled to scan the company’s books in search of cash, cryptocurrencies and other types of assets that could be sold to creditors scrambling to recover losses. The new CEO also commented that FTX is the most “difficult” case he has encountered in his 40 years in the profession.
FTX is the subject of investigations targeted by many legal authorities, such as the US Securities and Exchange Commission (SEC), the US Department of Justice, the Financial Police of the Bahamas. CFTC Chairman Rostin Behnam is expected to testify about the FTX’s demise during a U.S. Senate committee hearing on Thursday.