NewsletterJust In: Mike Novogratz Firm Galaxy Digital Has Exposure To FTX; How Bad Is It?
Galaxy Digital FTX Exposure News Update: Mike Novogratz Firm Galaxy Digital revealed it has exposure to FTX, the firm announced in its third quarter financial results. Earlier, crypto exchange Binance said it entered into a non-binding arrangement on fully acquiring FTX. The acquisition is aimed at resolving FTX’s liquidity crunch, the Binance chief CZ said. Following the announcement, the crypto market saw a massive plunge with Bitcoin (BTC) price witnessing nearly 10% decline in the last 24 hours.
Galaxy Digital Assets In FTX
In its quarterly results report, Galaxy Digital said it holds cash and digital assets in FTX. However, it said a bulk of it is in the withdrawal process. The company incurred a net comprehensive loss of $68.1 million during the quarter partly due to increased operating expense for its mining business. The losses were due to impairments in mining assets, driven by dislocations in the mining space, the company said.
“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.”
Market Exposure To FTX
In context of the dropping crypto prices after the Binance FTX acquisition announcement, doubts were raised on exposure to FTX for other crypto companies. However, companies like stablecoin issues Circle and crypto exchange Coinbase refuted claims of any exposure to FTX. Also, another crypto exchange OKX said it does not have any debt exposure to FTX, FTT or Alameda Research.
Michael Novogratz said the crypto industry continues to face macroeconomic headwinds and structural evolution. He added that Galaxy is focused on building for the future state of institutional adoption. Meanwhile, the FTX Token (FTT) fell drastically following the Binance acquisition announcement. As of writing, FTT price stands at $4.39, down by a staggering 74.69% in the last 24 hours, according to price tracking platform CoinMarketCap.
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