LedgerX to Pay $175M for FTX\u2019s Bankruptcy as Firm Plans to Resume Wages
One of the few FTX solvent units LedgerX is set to transfer $175 million to its parent company for bankruptcy proceedings, according to a report by Bloomberg. The capital comes from LergerX’s $250 million fund the subsidiary has put aside for getting regulatory approval for handling crypto derivatives trades without an intermediary. This move also comes in the wake of FTX announcing unfreezing payment for wages.
LedgerX Prepares a Capital Infusion for FTX from its $250M Fund
LedgerX, one of the few solvent businesses of the collapsed FTX group, is preparing a $175 million infusion for its parent company to help it with its bankruptcy proceedings. The funds could be transferred as soon as Wednesday, according to the report.
The funds reportedly stem from LedgerX’s $250 million fund that was intended for obtaining permission from the US Commodity Futures Trading Commission (CFTC) for clearing crypto derivatives trades without a need for an intermediary. However, LedgerX, also known as FTX US Derivatives, withdrew its request with the derivatives regulator after the FTX debacle.
A CFTC representative said the regulator is aware of the $175 million transfer, which would help the embattled crypto exchange’s investors recover some of the losses. Since announcing bankruptcy, the company’s executives have been struggling to secure funds to help repay creditors.
The move comes roughly a year after FTX acquired LedgerX, a digital currency futures and options exchange regulated by the CFTC. The acquisition was aimed at bringing regulated crypto derivatives to FTX’s US user base.
FTX to Continue Paying Wages to Global Employees and Contractors
FTX, along with its numerous entities, held around $1.24 billion in cash balances as of Nov. 20, a new court filing issued by the advisory firm Alvarez & Marsal North America earlier this week. The largest portion of that money, $393.1 million, comes from Alameda Research – FTX’s sister trading firm that was at the center of the company’s collapse – followed by LedgerX, which held $303.4 million in cash.
On Monday, FTX Trading and nearly 100 of its affiliates announced that the majority of subsidiaries will continue paying wages to employees around the globe, as well as to some non-U.S. contractors and service providers. However, it remains unclear whether the bankrupt crypto exchange will manage to return any of the billions of dollars in lost user funds.
FTX founder and former CEO Sam Bankman-Fried has been summoned to a hearing by the Texas securities regulator on February 2. SBF is set to address claims by the Texas State Securities Board (TSSB) that FTX US provided unregistered securities products through its yield-bearing offering.
This article originally appeared on The Tokenist
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