Failed crypto exchange FTX has recovered $5 billion, lawyers say

  • FTX cost last year at $32 billion
  • More than $8 billion in FTX customer money is missing
  • Plans to sell FTX partners were brought before the court

NEW YORK / WILMINGTON, Del., Jan 11 (Reuters) – Crypto exchange FTX has recovered more than $ 5 billion in liquid assets but most of the loss of customers in the collapse of the company founder by unknown Sam Bankman-Fried, a lawyer. because the company told the US bankruptcy court on Wednesday.

The company, which was valued last year at $32 billion, filed for bankruptcy protection in November and US attorneys have sued Bankman-Fried is setting up a “dangerous” fraud that could cost investors, consumers and lenders billions.

“We have received more than $5 billion in cash, investment funds and securities,” Andy Dietderich, an attorney for FTX, told U.S. Bankruptcy Judge John Dorsey in Delaware at the start of the hearing. on Wednesday.

Dietderich also said that the company plans to sell special investments that have a net worth of $4.6 billion.

However, Dietderich said that lawyers are still working to develop the correct internal data and that the exact failure of consumers is not known. The US Commodities Futures Trading Commission has estimated the loss of traders’ money at more than $8 billion.

Dietderich said the $5 billion recovered did not include assets seized by the Securities Commission of the Bahamas, where the company’s headquarters were located and where Bankman-Fried lived.

FTX’s lawyer estimated the seized assets to be worth at least $170 million but Bahamian authorities put the figure at up to $3.5 billion. The seized assets mostly consisted of FTX sales and FTT securities, which fluctuated greatly in value, Dietderich said.

ASSETS FOR SALE

FTX may raise additional funds in the coming months for the benefit of customers after Dorsey approves FTX’s request for a trial process. stakeholders at Wednesday’s hearing.

The specific organizations – LedgerX, Embed, FTX Japan and FTX Europe – are independent from the wider FTX community, and each has its own unique user profile. rights and various management groups, according to FTX data.

The crypto exchange said that it is not willing to sell any company, but it has received many unspecified offers and plans to hold auctions starting next month.

The Government Trustee, a government bankruptcy trustee, resistance sold together before the extent of the FTX scam was fully explored.

In part to save the cost of its business, FTX also sought Dorsey’s permission to withhold the names of FTX’s 9 million customers. The company says it needs privacy to prevent competitors from buying users but also to prevent identity theft and to comply with privacy laws.

Dorsey allowed the names to be fixed for only three months, not six months as FTX wanted.

“The difficulty here is I don’t know who is a buyer and who isn’t,” Dorsey said. He set a hearing for January 20 to discuss how FTX can distinguish between customers and said he wants FTX to return within three months to provide more information to the risk of identity theft when the names of customers are published.

Media companies and the US Trustee argued that US bankruptcy law requires disclosure of creditor information to ensure transparency and fairness.

In addition to selling partners, a company attorney said Wednesday that FTX will end a 19-year $135 million sponsorship deal with the NBA’s Miami Heat and a 7-year approx. and an $89 million deal with the League of Legends video game.

FTX founded, Bankman-Fried, 30, was indicted on two counts of wire fraud and six counts of conspiracy last month in federal court in Manhattan for allegedly stealing customer deposits. taking loans from his hedge fund, Alameda Research, as well as lying to investors about FTX’s financial situation. He has pleaded not guilty.

Bankman-Fried has identified flaws in FTX’s wrongdoing, but the billionaire says he doesn’t believe he’s guilty.

In addition to lost customer money, the company’s collapse appears to have wiped out investors.

Some of those investors who appeared on Monday were indicted by the court, including American football star Tom Brady, Brady’s ex-wife supermodel Gisele B√ľndchen and New England Patriots owner Robert Kraft.

Reporting by Dietrich Knauth in New York and Tom Hals in Wilmington, Del.; Edited by Alexia Garamfalvi, Mark Porter, Matthew Lewis and Anna Driver

Our Terms: The Thomson Reuters Trust Principles.

Thomson Reuters

Award-winning journalist with more than two decades of experience in international news, focusing on high-profile legal battles on everything from government policy to commercial transactions.

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