$5 Billion of Assets Secured by FTX
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An editor at Coincrop
12 Jan 2023 | 5 min read
uring a bankruptcy court hearing, an attorney for the FTX crypto exchange revealed that they had reclaimed over $5 billion in liquid assets and cash which should be used to reimburse creditors.
On Wednesday, a federal court in Wilmington, Delaware heard from FTX's attorney Andrew G. Dietderich that they had recovered substantial amount of illiquid crypto assets and other nonstrategic investments with combined book value of $4.6 billion, the Washington Post reported.
Moreover, attorneys have uncovered an astounding 9 million customer accounts - a figure that is exponentially more than what was initially projected at merely 1 million. Dietderich expressed his uncertainty in regard to the amount of funds available for FTX creditors via settlement, mentioning:
“We know all this has left a shortfall in the 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.”
John Ray III, the new leader of FTX, recently revealed that his team had recovered an astonishing $1 billion in assets. This is significantly more than what was previously disclosed in earlier reports!
At the time, Ray, an expert on bankruptcy and former head of Enron's financial recovery process, declared that the exchange had a complete lack of financial documentation which made it virtually impossible to monitor funds.
Ray pointed out that one of the primary problems with FTX and Alameda Research, which was supposed to represent two separate entities, is their tendency to mix user funds. This allows Alameda Research access to customers' money from FTX and exposes them to financial risks.
On Wednesday, Dietderich enlightened the bankruptcy court with his knowledge of where Alameda had allocated all their funds. He stated:
“It [Alameda] bought planes, houses, threw parties, made political donations. It made personal loans to its founders. It sponsored the FTX Arena in Miami, a Formula 1 team, the League of Legends, Coachella and many other businesses, events and personalities.”
Dietderich has declared to the court that the Bahamian authorities have confiscated a collection of crypto belonging to their firm, including $170 million in FTT tokens which is FTX's native token. Last week, US Department Of Justice stepped in and seized almost $500 million worth of Robinhood shares tied with Sam Bankman-Fried who is FTX’s disgraced founder.
Last December, Bankman-Fried was taken into custody in The Bahamas after US prosecutors charged him with criminal offenses. To secure his release from jail in the United States, he posted a staggering $250 million bond before an American court. Subsequently, he was given temporary freedom until the case is resolved.
In the Southern District of New York, SBF has been indicted on eight criminal charges including wire fraud and conspiracy for illegally exploiting customer accounts. The SEC also accused SBF of masterminding a trick to deceive equity investors in FTX apart from these allegations.
MikeAn editor at Coincrop
Mike is a Coincrop staff writer based in the UK, covering the best rates for cryptocurrency earning and borrowing products. When not at work, he's likely putting his latest car project back together.
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