Following the issues surrounding FTX, the publicly-listed firm Galaxy Digital published its third-quarter earnings report and noted it has an “exposure of approximately $76.8 million of cash and digital assets to FTX.” The news follows a great number of exchange executives announcing that they had zero material exposure to the troubled exchange.
Galaxy Digital Has Close to $77 Million in FTX Exposure
After Galaxy Digital was dealt with a blow from the Terra blockchain fallout and UST depegging event, the company has revealed exposure to the embattled crypto exchange FTX. It started on Nov. 6, when Binance CEO Changpeng Zhao (CZ) told the public his exchange would dump FTT, the FTX-built exchange token. Then, after a couple of days of confusion, CZ and FTX CEO Sam Bankman-Fried revealed Binance would be acquiring FTX, with details to be announced in the near future. However, Binance revealed on Nov. 9 that it has officially backed out of the deal to acquire FTX.
The news has rattled the crypto economy and it has dropped below the $900 billion mark for the first time since January 2021. Furthermore, the news has pushed a number of exchange executives from companies like Coinbase, Circle, Deribit, and more to announce the firms had no material exposure to FTX. However, amid the swathe of platforms saying they held no exposure to the troubled exchange, third-quarter (Q3) earnings stemming from Galaxy Digital show the firm had close to $77 million in exposure to FTX.
“On November 8, 2022, FTX.com (FTX), a digital asset exchange on which the partnership holds cash and digital assets, announced that it entered into a non-binding arrangement with Binance Holdings Ltd. to provide liquidity,” Galaxy’s Q3 report discloses. “As of the date of this filing, the partnership has an exposure of approximately $76.8 million of cash and digital assets to FTX, of which $47.5 million is currently in the withdrawal process.”
It is uncertain how the “withdrawal process” is going for Galaxy at the moment but in the Q3 report the billionaire investor and founder of Galaxy Digital, Michael Novogratz, said Galaxy remains focused. “While our industry continues to face macroeconomic headwinds and structural evolution, Galaxy remains focused on building for the future state of institutional adoption by taking deliberate steps to transform and simplify our operations,” Novogratz wrote.