FTX: Collapsed crypto giant recovers over $5bn of assets
Collapsed cryptocurrency exchange FTX has located more than $5 billion of assets, according to attorney Andy Dietderich. However, a US bankruptcy court was told on Wednesday that the extent of losses to customers is still not known. Prosecutors have accused FTX’s former CEO Sam Bankman-Fried of orchestrating an “epic” fraud that may have cost investors, customers, and lenders billions of dollars. Mr. Bankman-Fried has pleaded not guilty to the charges.
“We have located over 5 billion dollars of cash, liquid cryptocurrency and liquid investment securities,” Dietderich, an attorney for FTX, told US Bankruptcy Judge John Dorsey in Delaware. However, Dietderich also said that the recovered funds do not include assets seized by the Securities Commission of the Bahamas, where FTX was based and where Mr. Bankman-Fried was living at the time of his arrest.
The extent of the losses faced by customers is still not known, with most of FTX’s customers and investors who are facing losses not being named in the hearings. However, American Football Star Tom Brady, his former wife Giselle Bündchen, and New England Patriots owner Robert Kraft were mentioned in court filings as having lost funds in the collapse.
FTX was valued at $32 billion a year ago and filed for bankruptcy protection in November 2020. It has been estimated that $8 billion of customer’s funds were missing. US federal prosecutors have accused Mr. Bankman-Fried of misappropriating FTX customers’ funds to pay debts at his cryptocurrency trading firm Alameda Research and to make other investments.
FTX co-founder Gary Wang and Caroline Ellison, the former head of Alameda, have also been charged over their alleged roles in the company’s collapse. Authorities said they were both cooperating with the investigation. In December, prosecutors announced eight criminal charges, including wire fraud, money laundering, and campaign finance violations. Financial regulators have also brought claims against Mr. Bankman-Fried.
In late December, Mr. Bankman-Fried was released from detention on $250 million bail on condition that he does not leave his parents’ home in California. In an interview with BBC News before his arrest, he said: “I didn’t knowingly commit fraud. I don’t think I committed fraud. I didn’t want any of this to happen. I was certainly not nearly as competent as I thought I was.”
The collapse of FTX has raised concerns about the stability and security of cryptocurrency exchanges and the potential losses faced by customers. The recovery of $5 billion in assets is a positive step, but it remains to be seen how much of these funds will be returned to customers and investors. The ongoing legal proceedings will provide more information on the extent of the alleged fraud and the actions of those involved in the collapse of the exchange.
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