Last updated December 8th, 2022
FalconX Remains Strong: Looking Ahead in the Wake of FTX's Collapse
At FalconX, we understand that periods of high uncertainty are extremely challenging for our clients, partners, and the industry as a whole. We want to reaffirm to you, our clients and partners, that our financial position remains very strong in the wake of FTX’s bankruptcy.
Despite the contagion that has impacted crypto this year, FalconX continues to be one of the most trusted and proven partners for institutional investors. Our volumes have grown 80%+ month-over-month, and we continue to facilitate billions of dollars in daily trade volume for our clients.
Amidst the biggest fallout in crypto - resulting in bankruptcies across the industry - our financial health remains strong:
- FalconX balances locked on FTX represented 18% of our unencumbered cash equivalents. This ratio was within our counterparty exposure limits.
- In a 0% recovery scenario of FTX balances, FalconX remains one of the best-capitalized firms in digital assets. We have decades of runway, and we are highly liquid with a 4% debt-to-equity ratio with over 80% of our balance sheet in regulated U.S. banks.
- Furthermore, we have no exposure to Genesis, Alameda, or BlockFi.
Recent events have validated our approach to risk management. We are market risk neutral and extend credit overcollateralized on our platform. We utilize real-time risk monitoring, and we operate within the confines of our counterparty exposure limits.
We remain confident in the future of crypto and are committed to leading the industry’s maturation. To that end, we are actively working alongside other major partners to build more trusted institutional infrastructure.
Stay tuned for updates on these developments as they take shape.