Economy
Relief as FTX Recovers $5bn Assets in Customer Funds
By Adedapo Adesanya
FTX has recovered at least $5 billion of liquid assets, including cash, crypto, and securities, lawyers told a Delaware bankruptcy judge on Wednesday.
The crypto exchange was once valued at $32 billion but imploded after reports of financial impropriety, which ultimately gave way to criminal and regulatory probes, culminating in the arrest of its founder.
FTX’s new CEO, Mr John J. Ray, previously attested that at least $8 billion of customer assets were unaccounted for in the “worst” case of corporate control he’d ever seen.
The news comes after federal prosecutors announced plans to seize at least $500 million worth of FTX-connected assets in connection with their ongoing prosecution of FTX co-founder, Mr Sam Bankman-Fried.
The recovery will be a welcome relief to FTX customers, which are collectively owed at least $8 billion in missing assets after the crypto exchange imploded in November 2022.
The $5 billion figure regards “any value to holdings of dozens of illiquid cryptocurrency tokens, where our holdings are so large relative to the total supply that our positions cannot be sold without substantially affecting the market for the token,” FTX attorney, Mr Adam Landis told the court.
“We know what Alameda did with the money. It bought planes, and houses, threw parties and made political donations. It made personal loans to its founders. It sponsored the FTX Arena in Miami, a Formula One team, the League of Legends, Coachella and many other businesses, events and personalities,” the lawyer said.
He explained that this has led to a shortfall in value to repay customers and creditors.
“The amount of the shortfall is not yet clear. It will depend on the size of the claims pool and our recovery efforts. But every week, we come closer to completing the work necessary to estimate recoveries for the purposes of a plan of reorganization,” Mr Landis added.
FTX’s collapse was connected, among other things, to a failure to mark illiquid assets to market correctly. FTX executives, including Mr Bankman-Fried and Alameda Research CEO Ms Caroline Ellison, borrowed against the value of the FTX-issued token FTT.
Alameda controlled the vast majority of FTT coins circulating, similar to a publicly traded companies float, and could not have liquidated their position at full book value.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange broke a three-day losing streak after it gained 1.04 per cent on Thursday, June 11, on the back of a strong showing by Central Securities Clearing System (CSCS) Plc.
The Nigerian securities depository company recorded a N5.61 growth during the session to finish at N83.93 per share compared with the previous day’s N78.32 per share.
The rise in the share price of the company overpowered the losses printed by three other securities at the close of business.
Consequently, the market capitalisation of the trading platform went up by N26.68 billion to N2.617 trillion from N2.590 trillion, and the NASD Unlisted Security Index (NSI) closed higher by 44.89 points to 4,375.01 points from 4,330.12 points.
Yesterday, Nitrox Industrial Gases Plc declined by N2.38 to N21.48 per unit from N23.80 per unit, UBN Property Plc went down by 13 Kobo to N1.98 per share from N2.11 per share, and MRS Oil Plc dropped 10 Kobo to close at N158.00 per unit, in contrast to Wednesday’s closing price of N158.10 per unit.
The volume of securities transacted by investors during the session significantly went up by 2,558.6 per cent to 3.1 million units from 117,374 units, and the value of securities traded improved by 463.1 per cent to N68.5 million from the preceding session’s N12.2 million, while the number of deals moderated by 37.2 per cent to 27 deals from 43 deals.
At the close of business, Great Nigeria Insurance (GNI) Plc was the most traded stock by value on a year-to-date basis, with 3.4 billion units traded for N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units transacted for N6.5 billion, and CSCS Plc with 65.9 million units sold for N4.5 billion.
GNI Plc remained the most traded stock by volume on a year-to-date basis, with 3.4 billion units exchanged for N8.4 billion, followed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units worth N415.7 million.
By Dipo Olowookere
The key performance indices of the Nigerian Exchange (NGX) Limited moderated by 0.05 per cent on Thursday as a result of selling pressure by investors.
The sell-offs were mainly from the consumer goods and banking sectors, which contracted by 0.23 per cent and 0.17 per cent, respectively.
It was observed that the insurance counter closed higher by 0.73 per cent, the energy index appreciated by 0.10 per cent, and the industrial goods space was up by 0.09 per cent.
However, they could not prevent the bourse from crumbling at the close of business.
As a result, the All-Share Index (ASI) shrank by 113.47 points to 244,738.74 points from 244,852.21 points, and the market capitalisation slipped by N73 billion to N156.970 trillion from N157.043 trillion.
International Energy Insurance crashed by 10.00 per cent to N7.11, May and Baker stumbled by 8.51 per cent to N43.00, Tripple Gee contracted by 8.47 per cent to N4.00, Abbey Mortgage Bank slumped by 7.69 per cent to N11.40, and AXA Mansard dipped by 6.67 per cent to N12.60.
Conversely, Consolidated Hallmark improved by 10.00 per cent to N8.25, Learn Africa surged by 10.00 per cent to N11.00, Nigerian Enamelware was elevated by 10.00 per cent to N40.70, University Press chalked up 10.00 per cent to finish at N5.50, and ABC Transport gained 8.25 per cent to end at N7.80.
A total of 31 stocks were on the gainers’ chart, and 33 stocks were on the losers’ table, indicating a negative market breadth index and bearish investor sentiment.
On the activity chart, market participants bought and sold 1.7 billion equities valued at N52.8 billion in 49,807 deals, in contrast to the 1.2 billion equities worth N38.8 billion traded in 54,193 deals at midweek. This showed that the trading volume was up by 41.67 per cent, the trading value was up by 36.08 per cent, and the number of deals was down by 8/09 per cent.
The most active stock yesterday was FCMB with a turnover of 584.7 million units worth N5.9 billion, Access Holdings sold 579.8 million units for N14.0 billion, UBA exchanged 107.0 million units valued at N4.6 billion, NGX Group transacted 49.1 million units worth N6.7 billion, and AIICO Insurance traded 30.1 million units for N134.2 million.
By Adedapo Adesanya
The value of the Naira further tumbled against the United States Dollar by N1.78 or 0.13 per cent in the Nigerian Autonomous Foreign Exchange Market (NAFEX) to N1,363.83/$1 on Thursday, June 11, from N1,362.05/$1 on Wednesday.
However, it gained N6.08 on the Pound Sterling in the official market to trade at N1,821.25/£1 versus midweek’s rate of N1,827.33/£1, and appreciated against the Euro by N2.46 to sell at N1,572.89/€1 compared with the preceding session’s N1,575.35/€1.
At the GTBank forex counter, the Nigerian Naira lost N1 against the Dollar during the session to quote at N1,371/$1, in contrast to Wednesday’s value of N1,370/$1, and at the parallel market, it remained unchanged at N1,380/$1.
The Nigerian currency is expected to be steady, underpinned by Dollar sales by the Central Bank of Nigeria (CBN), especially with gross external reserves rising to $50.439 billion, reflecting sustained inflows from oil revenue and other FX sources.
Traders expect the local currency to remain stable as the central bank continues to sell dollars and keep up its aggressive OMO (Open Market Operations) programme to mop up Naira
Confidence in the Naira remains firm with recent nods from S&P, World Bank, and the International Monetary Fund (IMF).
A look at the cryptocurrency market showed that it was bullish on Thursday, as President Donald Trump said the US was close to a deal with Iran and that he had “ended the war with Iran today.” Markets read it as the end of a conflict that has whipsawed prices for more than 100 days.
Market analysts noted that a calmer Middle East takes pressure off oil, which eases the inflation that has fed bets on higher interest rates – the same rate fear that helped drag crypto down this week.
Cardano (ADA) rose 2.5 per cent to $0.1683, Solana (SOL) appreciated by 1.5 per cent to $66.05, Ripple (XRP) grew by 1.3 per cent to $1.12, Dogecoin (DOGE) expanded by 0.6 per cent to $0.0853, Bitcoin (BTC) jumped 0.4 per cent to $62,909.08, Binance Coin (BNB) soared by 0.3 per cent to $596.41, Ethereum (ETH) increased by 0.2 per cent to $1,655.02, US Dollar Tether (USDT) advanced by 0.11 per cent to $1.00, and US Dollar Coin (USDC) improved by 0.03 per cent to $1.00, while TRON (TRX) slumped by 2.8 per cent to $0.3126.
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