By
Mayowa Adebajo
April 11th, 2024
Inside sources at QCP Capital reported a sizable stake stuck with FTX as the ill effects of the exchange’s collapse prevail.
Crypto trading platform QCP Capital reportedly has at least $97 million trapped with collapsed crypto exchange FTX. Inside sources also claim that QCP has been trying to sell its claim to distressed asset buyers. This move is part of an attempt by the Singapore-based company to redeem some funds.
QCP to Continue Operations Unperturbed
QCP Capital first intimated its FTX exposure on Twitter last month but did not disclose the amount. The company also added that although it had active trading positions on FTX, it was able to remove a substantial amount of assets from the ill-fated exchange. Furthermore, QCP said efforts are underway to recover the remaining assets frozen with FTX. According to the company, the frozen funds at FTX do not impact its operability. According to a tweet, “the situation has not impacted our ability to serve clients or counterparties. Business carries on as usual, and our trading desk continues to operate normally.”
Doubling down on its ability to withstand potential asset loss on its balance sheet, QCP explained:
“We are well placed to weather the impact of any potential loss of assets. We also do not engage in any lending or borrowing and there is no exposure for the company in this aspect.”
The Singaporean crypto trading platform also pledged to remain a responsible and trusted player in the institutional crypto ecosystem. Furthermore, QCP expressed a desire to collaborate with all the stakeholders of the digital currency space to forge a more robust industry.
QCP operates a crypto derivatives-focused 24/7 trading desk and handles proprietary trading and market-making services. According to the company, it has dealt with trades worth $38 billion so far this year. QCP is currently awaiting licensing from the Monetary Authority of Singapore as a leading payments institution offering crypto services.
FTX Contagion Impacting QCP Capital, Others
QCP is one of the countless crypto companies drastically affected by the sudden implosion of FTX. Other companies like Galois Capital, Genesis Block HK, and Multicoin Capital reportedly also have funds frozen at the defunct Bahamian exchange. Genesis Block HK, in particular, suffered such a significant impact that it shut down its over-the-counter (OTC) trading business last week after 10 years.
Since FTX filed for bankruptcy, several other smaller crypto exchanges and lending platforms have also filed after encountering liquidity crises. For example, in late November, crypto loan platform BlockFi filed for Chapter 11 Bankruptcy due to its close financial ties with FTX.
FTX crashed after a string of events that saw several of its customers rush to withdraw their funds, akin to a bank run. This unsavory development led to the exchange freezing withdrawals, but at that point, it was too little too late. FTX currently owes billions of dollars to its creditors, with the top 50 creditors owed a staggering $3.1 billion.
The disgraced former CEO of the exchange, Sam Bankman-Fried, was arrested in the Bahamas earlier in the week and faces US extradition.