FTX Subsidiary Will Release $175 Million For Use During Bankruptcy Proceedings

LedgerX, a subsidiary of FTX Group that also had to seek bankruptcy protection due to its parent company's collapse, will make available $175 million for use in the Chapter 11 proceedings for the crippled cryptocurrency exchange and its other firms.

A $250 million fund was set aside by LedgerX in order to obtain a regulatory license to clear crypto derivatives trades without middlemen. Those funds might be transferred as soon as today, according to a Bloomberg report.

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On Nov. 11, FTX Group (CRYPTO: FTT) filed for bankruptcy, and LedgerX withdrew its application with the US Commodity Futures Trading Commission (CFTC).

Last year, FTX US purchased LedgerX and renamed it FTX US Derivatives.

A CFTC representative told Bloomberg that the organization is aware of a planned move.

FTX's creditors may receive payment from the transferred funds. A recent court filing revealed that The FTX Group had more than one million total creditors.

The group presently owes its top 50 debtors $3.1 billion, which is a significant amount when compared to the organization's aggregate cash balance of $1.24 billion.

A sudden liquidity crisis led to the collapse of the FTX Group earlier this month.

The operator of the cryptocurrency exchange allegedly used customer funds to support risky bets made by its sister trading firm, Alameda Research, which led to the company's collapse.

At a US Senate committee hearing on Thursday, CFTC Chair Rostin Behnam is scheduled to give a testimony regarding the FTX collapse.

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