FTX Suddenly Recovered Over $5 Billion Of Assets
- FTX suddenly recovered over $5 billion in highly liquid assets, including crypto and cash.
- The number of recoveries is surprisingly high compared to the $1 billion recovered last month. However, the specific property list has yet to be disclosed.
- The large amount gives hope of additional compensation to the investors and creditors of the exchange.
FTX suddenly recovered $5 billion in highly liquid assets, including cash and crypto, according to the exchange’s bankruptcy attorney.
During the bankruptcy trial of the FTX exchange held on January 11, 2023 (US time), the lawyer representing the exchange raised the number of recovered assets to $5 billion, a surprising number compared to previous predictions.
“We have located over $5 billion of cash, liquid cryptocurrency and liquid investment securities measured at petition date value. [It] just does not ascribe any value to holdings 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 for the token,”Landis Rath & Cobb attorney Adam Landis on FTX’s behalf, said.
FTX also added that the latest asset estimate does not include the amount of $425 million in cryptocurrencies being managed by the Bahamas government.
The latest statement from FTX surprised many people when on December 20, 2022, the exchange announced that it had only recovered $ 1 billion in assets. Still, now it has reached $ 5 billion, only less than one month later.
However, the detailed list of assets that FTX has recovered still needs to be determined.
Meanwhile, according to documents compiled by former CEO Sam Bankman-Fried at the time of FTX’s bankruptcy, the exchange had more than $9 billion in assets but only about $1 billion in cash and marketable securities immediately. The rest are incredibly illiquid cryptocurrencies.
The increase in the number of restored FTX assets will further ignite the hope of more compensation for the exchange’s investors and creditors, who previously had to prepare themselves for only taking about 1/10 of the amount of money locked on the floor.
“The amount of the shortfall is not yet clear, and it will depend on the size of the claims pool and our recovery efforts. But every week, we come closer to completing the work necessary to estimate recoveries for a plan of reorganization,” Landis said.Landis said.
It is estimated that the amount of money FTX leaves a deficit in using users’ deposit funds to invest with Alameda is about $8-$10 billion.
At the trial, FTX’s lawyer also accused former CEO Sam Bankman-Fried of directing former CTO Gary Wang to build a “backdoor” on FTX to withdraw users’ funds without being detected. The Alameda Foundation has borrowed up to $65 billion from FTX. That money was then spent by the FTX and Alameda team to buy real estate, build offices, and sign contracts to sponsor sports, parties, and political donations for the FTX managers themselves -Alameda borrowed.
In addition, the judge allowed FTX to keep confidential information of more than 9 million individual and institutional creditors of the exchange for another three months to ensure privacy. Before that, many major Western news agencies had filed a petition asking the court to declassify information about creditors.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join us to keep track of news: https://linktr.ee/coincu