Factbox-From BlockFi to Genesis, Crypto Firms Reeling from FTX Exposure

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(Reuters) – After the collapse of major cryptocurrency exchange FTX, the industry felt a ripple effect due to the exposure of many companies to FTX and its affiliate trading firm Alameda Research. On January 3, FTX founder Sam Bankman-Fried pleaded not guilty to criminal charges of misleading investors and causing billions of dollars in losses.

Here are some companies that have provided information about their exposure to FTX.

BLOCFI

BlockFi filed for bankruptcy on November 28, weeks after the crypto lender said it was suspending customer withdrawals. In July, FTX had signed an agreement with an option to buy BlockFi for up to $240 million.

GENESIS

Genesis is working to preserve client assets and bolster liquidity, he said in a letter to clients in December, adding that it would take “weeks rather than days” to come up with a plan.

The crypto lending arm of US digital asset broker Genesis Trading suspended client redemptions last month, citing the sudden failure of FTX.

Genesis said in a tweet on Nov. 10 that its derivatives business has approximately $175 million in funds locked up on FTX.

However, Genesis had no material exposure to FTX’s native FTT token, or any other tokens issued by centralized exchanges, the company said in a tweet on Nov. 9.

BINANCE

Binance CEO Changpeng Zhao sparked concern among investors on Nov. 6 when he said in a tweet that the crypto exchange would sell off its FTT holdings.

Zhao said at a Twitter Spaces event that Binance previously held $580 million worth of FTT, of which “we only sold a small portion, we still hold a big bag.”

Binance said on November 13 that it had stopped accepting deposits of FTX’s FTT token on its platform, urging other rival exchanges to do the same.

CELSIUS NETWORK

The New York Attorney General has filed a civil lawsuit accusing Celsius Network founder Alex Mashinsky of conspiring to defraud hundreds of thousands of investors by tricking them into depositing billions of dollars in digital assets with his cryptocurrency company.

The story continues

Between 2020 and 2022, under Mashinsky’s watch, Celsius made loans totaling about $1 billion to Alameda Research, according to a filing.

COINBASE

Coinbase Global Inc said in a blog post on Nov. 8 that it has $15 million in deposits on FTX. He said he had no exposure to FTT or Alameda Research and no loans to FTX.

COINSHARES

Crypto asset manager CoinShares has $30.3 million exposure to crypto exchange FTX, it said in a statement on November 10.

CoinShares CEO Jean-Marie Mognetti said the group’s financial health remained “strong”.

CRYPTO.COM

Crypto.com, the Singapore-based crypto exchange, said on Nov. 14 that it transferred about $1 billion to FTX over the course of a year, but most of it was recovered and exposure at the time. from the collapse of FTX was less than $10 million.

CEO Kris Marszalek said the company would prove any naysayers who thought the platform was in trouble wrong, adding that it had a strong balance sheet and was taking no risks.

DIGITAL GALAXY

Crypto financial services firm Galaxy Digital Holdings Ltd said in its third-quarter earnings statement on Nov. 9 — the day after FTX froze withdrawals — that it had $76.8 million of exposure to FTX, of which $47.5 million was “being withdrawn.”

GALOIS CAPITAL

Hedge fund Galois Capital had half of its assets trapped on FTX, co-founder Kevin Zhou told investors in a recent letter, the Financial Times reported on November 11, estimating the amount at around $100 million.

On November 13, the company confirmed that it had up to $45 million in exposure to the now-collapsed FTX cryptocurrency exchange, Bloomberg News reported.

KRAKEN

Cryptocurrency exchange Kraken said on November 10 that it held around 9,000 FTT tokens on the FTX exchange and was not affected “in a material way”.

SILVERGATE CAPITAL CORP

Silvergate Capital Corp reported a sharp decline in crypto-related deposits in the fourth quarter as investors spooked by the collapse of FTX withdrew more than $8 billion in deposits.

The company said Nov. 11 that FTX accounted for less than 10% of the $11.9 billion in deposits from all digital asset customers as of Sept. 30.

The digital asset financial solutions provider also said Silvergate has no outstanding loans or investments in FTX.

DIGITAL TRAVELER

Bankrupt crypto lender Voyager Digital, which was to sell its assets to FTX after a $1.42 billion offering by the exchange in September, had a balance of around $3 million at FTX.

SHADES OF GREY

Crypto asset manager Grayscale, whose flagship product Grayscale Bitcoin Trust (GBTC) is the world’s largest bitcoin fund, told investors that recent market events had no impact on operations of its products or on the security of the assets of its funds.

(Reporting by Elizabeth Howcroft in London, Mehnaz Yasmin, Medha Singh Niket Nishant and Manya Saini in Bengaluru and Hannah Lang in Washington; Editing by Jan Harvey and Matthew Lewis)

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