Collapsed cryptocurrency exchange FTX said it has recovered more than $5 billion in cash and crypto assets it may be able to sell to help pay back customers and investors, a lawyer for the firm said on Wednesday. the company in a Delaware bankruptcy court.
The firm’s advisers have identified a significant amount of crypto that will be harder to sell without depressing the market price of those digital tokens, said FTX attorney Andrew Dietderich. The company is also trying to sell other “non-strategic investments” made by FTX that have a book value of $4.6 billion, he said.
It’s unclear just how much of a shortfall FTX’s creditors will face as the firm’s advisers continue to work to salvage what they can from the crypto giant’s shock implosion in November. But the company, once one of the largest cryptocurrency exchanges in the world, has identified more than 9 million customer accounts, Dietderich said, suggesting there will be an incredibly long line of people seeking healing.
Federal regulators have estimated that FTX customer losses exceed $8 billion. John J. Ray III, the corporate liquidation expert who now runs the company, told lawmakers last month that the company would not be able to recoup all of its losses and expects the process takes “months, not weeks”.
FTX co-founder Sam Bankman-Fried pleaded not guilty to eight criminal charges of fraud and money laundering in Manhattan federal court last week. Federal prosecutors and regulators have accused him of orchestrating a years-long scheme to defraud the firm’s clients by diverting their deposits to its affiliate investment firm, Alameda Research, and then using the funds as a piggy bank. personal.
“We know what Alameda did with the money,” Dietderich told bankruptcy court Wednesday. “He bought planes, houses, threw parties, made political donations. It made personal loans to its founders. He has sponsored the FTX Arena in Miami, a Formula 1 team, the League of Legends, Coachella and many other companies, events and personalities.
Bankman-Fried and his entourage also made risky cryptocurrency bets, “often unsuccessfully,” Dietderich said, and invested in various businesses. “We know all of this has left a shortfall in value to repay customers and creditors,” he said. “The amount of the shortfall is not yet clear. It will depend on the size of the claims pool and our recovery efforts.