FTX’s LedgerX to Provide $175M for Bankruptcy Proceedings

One of the few solvent subsidiaries of FTX Group, LedgerX, will set aside $175 million for use in its parent company’s bankruptcy proceedings, Bloomberg reported on 30 November.

The publication cited people with knowledge of the matter, who said LedgerX will use $175 million out of a $250 million fund the company had set aside. Originally, LedgerX was going to use the funds in a bid to get regulatory approval to settle crypto derivatives without the use of intermediaries, but the company withdrew its application with the U.S. Commodity Futures Trading Commission (CFTC) when FTX Group filed for bankruptcy earlier this month.

LedgerX — which was acquired by FTX.US in 2021 — was one of the few companies to remain solvent after the collapse of FTX, the others being FTX Australia, FTX Express, and FTX Digital Markets. Over 130 companies affiliated with FTX Group, however, had to file for Chapter 11 bankruptcy protection alongside the crypto exchange on 11 November.

A CFTC spokesperson also told Bloomberg that the agency was aware of a planned transfer, which if successful, will provide a slight comfort to the more than 1 million FTX creditors. The list of FTX creditors provided to the bankruptcy court earlier this month revealed that FTX owed its top 50 creditors around $3.1 billion, while it had only around $1.24 billion combined cash balance.

While LedgerX remained solvent, other companies in the industry felt the impact of FTX’s collapse. Crypto lender BlockFi filed for Chapter 11 bankruptcy earlier this week, citing FTX as the reason for its troubles. In its first day of bankruptcy hearings, BlockFi revealed that it had around $355 million in assets stuck on the FTX platform on top of a $680 million defaulted loan from FTX’s sister company Alameda Research.