• Ripple CEO Brad Garlinghouse recently revealed that the blockchain payments company had exposure to FTX, leasing around $10 million in XRP to the now-defunct crypto exchange.
• Last November, FTX and over 130 companies filed for bankruptcy protection after a bank run exposed an estimated $8 billion hole in its balance sheet.
• Ripple frequently gives short-term XRP leases to market makers and XRP participants for sales, typically returned to Ripple.
Ripple, the blockchain payments company, has recently been exposed to the now defunct crypto exchange FTX. In a recent fireside discussion on CNBC’s Tech Transformers at Davos, Ripple CEO Brad Garlinghouse revealed that the company had leased around $10 million in XRP to FTX. He stated that Ripple is hopeful to receive some or all of it back through the bankruptcy process but noted that it is not too consequential to the business as it only represented 1% of Ripple’s liquid assets.
The financial trouble that Ripple encountered with FTX began last November, when the exchange and over 130 companies filed for bankruptcy protection after a bank run exposed an estimated $8 billion hole in its balance sheet. In just 24 hours, the company’s value fell from nearly $32 billion to $1.
Ripple typically gives short-term XRP leases to market makers and XRP participants for sales. These leases are typically returned to Ripple upon expiration. However, with the fraud that Sam Bankman-Fried allegedly committed, it is unclear what the company will receive from the lease.
In the meantime, Ripple’s conflict with the SEC persists as the legal battle drags on, with the latest development being the SEC’s motion to deny the motion to dismiss that was filed by Ripple. While there is still uncertainty surrounding the future of Ripple, the company and its CEO remain hopeful that it will be able to recover its exposure to FTX and come out on top.