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Galaxy Digital Held $77 Million in FTX Exposure, Earnings Show

Summary:
In its recently released third-quarter earnings report, crypto financial services firm Galaxy Digital revealed that it holds over million worth of exposure to FTX, the mainstream crypto exchange that is now experiencing a liquidity crisis.  Per the report, the .8 million of exposure is comprised of both cash and digital assets. Within that, .5 million is still in the withdrawal process. FTX appears to have stopped processing withdrawals on Tuesday after the company experienced overwhelming net outflows early this week.  The company also experienced a net loss of .1 million in Q3, versus a net profit of 9 million in Q3 2021.  Speaking on the firm’s earnings conference call, Galaxy CEO Mike Novogratz said that the FTX fallout has “put a short-term wrench” in

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In its recently released third-quarter earnings report, crypto financial services firm Galaxy Digital revealed that it holds over $76 million worth of exposure to FTX, the mainstream crypto exchange that is now experiencing a liquidity crisis. 

  • Per the report, the $76.8 million of exposure is comprised of both cash and digital assets. Within that, $47.5 million is still in the withdrawal process.
  • FTX appears to have stopped processing withdrawals on Tuesday after the company experienced overwhelming net outflows early this week. 
  • The company also experienced a net loss of $68.1 million in Q3, versus a net profit of $519 million in Q3 2021. 
  • Speaking on the firm’s earnings conference call, Galaxy CEO Mike Novogratz said that the FTX fallout has “put a short-term wrench” in the crypto industry. After Binance refused to bail out the firm, crypto markets have sunk to a total market cap of under $800 billion. Meanwhile, Galaxy’s stock (GLXY) has fallen to $3.92 as of Wednesday – a 15% drop.
  • Novogratz added that the industry has been “nimble” enough to navigate scandals in the past, and will eventually return to being correlated with the macroeconomy. 
  • Galaxy co-President Chris Ferraro said that the firm held no exposure to Alameda – a sister company of FTX which has recently gone dark
  • Galaxy Digital was reported last week to be planning to reduce its headcount, in consideration of “optimal team structure and strategy.”

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