FalconX is an institutional crypto trading platform. It was revealed in a company blog post Today, 18% of the “unencumbered cash alternatives” are still locked on FTX.
In the event of a worst case scenario, where none of the money can be recovered, FalconX said it has “decades of runway,” meaning that it has enough capital on hand to continue operating.
The company previously hesitated to state whether it held any assets on FTX.
Two weeks ago Raghu Yarlagadda was the CEO of FalconX. Bloomberg TV. When asked about whether the company had funds locked on FTX, he asked for the question to be repeated, and then explained that FTX’s restructuring process will be long and complicated. When he was asked a third time, he said FalconX was “well operating within our risk tolerance,” which was the reason the firm “walked out of this with a small position relative to our balance sheet.”
In Friday’s blog post, FalconX restated what it has said before about having no exposure to Genesis, the Beleaguered Digital Currency Group’s trading desk; Alameda Research founded by former FTX CEO Sam Bankman Fried; BlockFi, a cryptocurrency lender that received a bailout from FTX US, and has had to shut down since. For bankruptcy filings following FTX’s petition for Chapter 11 protection.
It’s been more than a month since it became clear that FTX was in trouble and then declared bankruptcy, but firms are still coming forward to disclose their exposure. Although it hasn’t taken any formal action in response to FTX’s bankruptcy, the U.S. Securities and Exchange Commission has been paying attention.
The SEC published Thursday’s report Guidelines updated We are asking companies to give more information about their cryptocurrency holdings.
These guidelines contain the following: sample letter on the regulator’s website, say that firms should disclose third-party crypto market participants, risks to the company’s liquidity, access to financing, and potential impact of any “legal proceedings, investigations, or regulatory” matters.
The guidance also specifically called out flagging the “downstream effect” of bankruptcy of third-party companies could impact firms themselves.
A crypto insurance protocol Nexus Mutual revealed a earlier in the week. Exposure to $3 Million Ethereum to Orthogonal Trading, another knock-on effect from FTX’s collapse. On Monday, crypto exchanges Swytftx & Bybit announced they were reducing their headcount as the crypto bear market intensified following the FTX’s downfall.