QCP Capital has $97 million stuck in FTX: Exposure List Lengthens.

Singapore-based QCP Capital claims to have $97 million stuck in FTX; these claims were initially denied.
QCP is trying to sell claims on frozen funds to calm the clientele.
FTX owes its top 50 creditors $3.1 billion.

The recent FTX collapse has caused a domino effect in the crypto industry, where all those who were associated with the now-bankrupt exchange are suffering because of their exposure. The list includes Genesis Trading with $175 million; hedge fund Galois Capital with $100 million; Galaxy Digital had $77 million; and the European digital asset manager CoinShare had $30 million exposed. Joining this infamous list is QCP Capital, with $97 million stuck on FTX.

QCP Capital is a digital asset trading firm based in Singapore, founded in 2017 by Darius Sit. It claims to have at least $97 million stuck in FTX which filed for bankruptcy on November 11. QCP is trying to sell a claim on the frozen funds to compensate anxious asset buyers, as per media reports.

QCP admitted to having exposure to FTX but never disclosed the extent of exposure. Also, they claimed to have had an active trading position on FTX, and they had managed to take out “a substantial amount of assets” and had only a minuscule amount stuck in the exchange.

A QCP spokesperson said: “We have sufficient equity to absorb the impairment from the position,”

Although any comment on the frozen fund’s value was declined, he said that their business remains healthy and profitable. Withdrawals are going on as usual. And neither clients nor counterparties were affected by the impairment.

QCP capital operates a crypto derivatives-focused trading desk 24/7. It engages in proprietary trading, and also market-making services. The firm claims to have handled approx $38 billion worth of trades this year. QCP is currently working as an exempt payment service provider, waiting to get a license from the Monetary Authority of Singapore, which shall allow it to become a major payment institution that provides crypto services.

Looming Contagion Risk

FTX collapse created a contagion risk, where those in direct contact were affected, but the firms in the vicinity are also experiencing some effects. The exchange filed for bankruptcy on November 11th, which left approximately 1 million creditors in a limbo. So much so that FTX owes around $3.1 billion to its top 50 creditors alone, as per the filing details submitted in court.

Some FTX creditors are believed to have sold their claims for minuscule prices to avoid this year-long wait for closure. Apollo Global Management and Attestor are part of this group of agitated investors, which held conversations regarding snapping up the FTX claims.

507 Capital has purchased several claims already for cents to dollars from hedge funds.

Everyone affected by FTX, either directly or indirectly, shall have closure only after the final verdict, let alone compensation for the lost assets. But how and when it will happen is not certain yet.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing