- Ripple CEO Brad Garlinghouse said that the business had exposure to FTX.
- Garlinghouse said that the now-defunct cryptocurrency exchange received a $10 million XRP lease from the company.
- He said that the company’s exposure to FTX, which made up 1% of liquid assets, wasn’t too consequential.
In a recent fireside discussion on CNBC’s Tech Transformers at Davos, Ripple CEO Brad Garlinghouse revealed that the blockchain payments startup had exposure to FTX.
Garlinghouse said that the now-defunct cryptocurrency exchange received a $10 million XRP lease from Ripple, which “they used on various things related to FTX.”
“FTX in my view now gets painted as a crypto problem. I think if you really peel enough onion layers, it’s not really a crypto … problem to happen here, it’s fraud. And I think we should not pretend it’s something else,” the CEO Ripple told CNBC.
According to Garlinghouse, the company anticipates recovering those cash via US bankruptcy procedures.
“… we did have some exposure to FTX. I think … we’ve publicly shared before there’s around just over $10 million of XRP we had leased to FTX that they use for various things on FTX… I’m hopeful that through the bankruptcy process, we get some or all of it back but uh it’s not too consequential to the business.”
The company’s exposure to FTX, which accounted for 1% of liquid assets, wasn’t “too consequential,” he added.
“And for us… that I think represented about 1% of liquid assets. I would rather not lose that money. And I’m hopeful that through the bankruptcy process, we get some or all of it back, but it’s not too consequential to the business.”
However, as per its quarterly report, Ripple often grants short-term XRP leases to market makers and players from XRP intended for sales. These leases are often returned to Ripple. The total number of unpaid leases as of Q3 2022 was 91.1 million XRP. What safeguards are in place if a counterparty fails to repay leased XRP is not yet known.
According to a report from The Times, the head of Ripple has previously expressed interest in acquiring FTX assets, notably shares in companies that cater to institutions.
Notably, Garlinghouse made this statement when he disclosed that he had spoken with SBF a few days before the exchange declared bankruptcy. The CEO of the blockchain company said that he had indicated a desire to offer the exchange liquidity in return for a share in companies that would be advantageous to it.
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