FTX recovered $5 billion in ‘liquid’ assets, lawyers say

John Ray, managing director of FTX Cryptocurrency Derivatives Exchange, arrives at bankruptcy court in Wilmington, Delaware, U.S., Tuesday, November 22, 2022.

Eric Lee | Bloomberg | Getty Images

FTX recovered more than $5 billion in liquid assets, including cash and digital assets, Delaware bankruptcy court attorneys said Wednesday during a hearing into FTX’s bankruptcy.

The news comes after federal prosecutors announced plans to seize at least $500 million in FTX-related assets in their ongoing lawsuit against FTX co-founder Sam Bankman-Fried.

The recovery will be a welcome boon to FTX clients, who collectively owe at least $8 billion in missing assets after the crypto exchange implosed in November 2022.

The $5 billion figure relates to “any holdings value of dozens of illiquid cryptocurrency tokens, where our holdings are so large relative to the total supply that our positions cannot be sold without significantly affecting the market. token,” said FTX attorney Adam Landis. to research.

FTX’s collapse was linked, among other things, to an inability to properly mark illiquid assets in the market. FTX executives, including Caroline Ellison, CEO of Bankman-Fried and Alameda Research, have borrowed against the value of the FTT token issued by FTX. Alameda controlled the vast majority of FTT coins in circulation, like a float of publicly traded companies, and could not have liquidated their position at full book value.

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