FTX crypto exchange has recovered more than $5bn, lawyer says
Crypto exchange FTX has recovered more than $5 billion in liquid assets but the extent of customer losses in its collapse is still unknown, a lawyer for the bankrupt company, founded by Sam Bankman-Fried, said on Wednesday.
The company, which was valued a year ago at $32 billion, filed for bankruptcy protection in November and US prosecutors accused Mr Bankman-Fried of orchestrating an “epic fraud" that may have cost investors, customers and lenders billions of dollars.Read More : Crypto investors' hot streak ends as harsh 'winter' descends “We have located over $5 billion of cash, liquid cryptocurrency and liquid investment securities,” Andy Dietderich, a lawyer for FTX, told a US bankruptcy judge in Delaware at the start of Wednesday's hearing.
Mr Dietderich also said that the company plans to sell non-strategic investments that had a book value of $4.6 billion.
However, Mr Dietderich said the legal team is still working to create accurate internal records and the actual customer shortfall remains unknown. The US Commodities Futures Trading Commission has estimated missing customer funds at more than $8 billion.
FTX's lawyer estimated the seized assets were worth as little as $170 million while Bahamian authorities put the figure as high as $3.5 billion. The seized assets are largely composed of FTX's proprietary and illiquid FTT token, which is highly volatile in price, Mr Dietderich said.
The company's founder, Mr Bankman-Fried, was indicted on two counts of wire fraud and six counts of conspiracy last month in Manhattan federal court for allegedly stealing customer deposits to pay debts from his hedge fund, Alameda Research, and lying to equity investors about FTX's financial condition. He has pleaded not guilty.
Mr Bankman-Fried has acknowledged shortcomings in FTX's risk management practices, but the one-time billionaire has said he does not believe he is criminally liable.
In addition to customer funds lost, the collapse of the company is also likely to have wiped out equity investors.
Some of those investors were disclosed in a Monday court filing, including American football star Tom Brady, Brady's former wife supermodel Gisele Bundchen and New England Patriots owner Robert Kraft.
The company, which was valued a year ago at $32 billion, filed for bankruptcy protection in November and US prosecutors accused Mr Bankman-Fried of orchestrating an “epic fraud" that may have cost investors, customers and lenders billions of dollars.
Mr Dietderich also said that the company plans to sell non-strategic investments that had a book value of $4.6 billion.
However, Mr Dietderich said the legal team is still working to create accurate internal records and the actual customer shortfall remains unknown. The US Commodities Futures Trading Commission has estimated missing customer funds at more than $8 billion.
FTX's lawyer estimated the seized assets were worth as little as $170 million while Bahamian authorities put the figure as high as $3.5 billion. The seized assets are largely composed of FTX's proprietary and illiquid FTT token, which is highly volatile in price, Mr Dietderich said.
The company's founder, Mr Bankman-Fried, was indicted on two counts of wire fraud and six counts of conspiracy last month in Manhattan federal court for allegedly stealing customer deposits to pay debts from his hedge fund, Alameda Research, and lying to equity investors about FTX's financial condition. He has pleaded not guilty.
Mr Bankman-Fried has acknowledged shortcomings in FTX's risk management practices, but the one-time billionaire has said he does not believe he is criminally liable.
In addition to customer funds lost, the collapse of the company is also likely to have wiped out equity investors.
Some of those investors were disclosed in a Monday court filing, including American football star Tom Brady, Brady's former wife supermodel Gisele Bundchen and New England Patriots owner Robert Kraft.
Source: www.thenationalnews.com
