The FTX logo displayed on a phone screen is visible through broken glass in this illustrative photo taken in Krakow, Poland on November 14, 2022.
Jakub Porzycki/NurFoto via Getty Images
Bankrupt cryptocurrency firm FTX said on Tuesday that $415 million worth of cryptocurrencies had been hacked from the exchange’s accounts, representing a sizable portion of the identified assets the company is seeking to recover.
In a presentation titled “Maximizing FTX Recoveries,” attorneys and counsel for FTX debtors updated the total liquid assets identified for recovery and said they are valued at approximately $5.5 billion.
However, that includes “unauthorized third-party transfers” of $323 million from FTX.com (the international business) and $90 million from FTX US, the company said in a statement. Another $2 million worth of cryptocurrencies from hedge fund Alameda Research were also stolen. The missing cryptocurrency could be linked to a hack of FTX’s systems that was discovered shortly after the company’s collapse in November.
At the time, the stolen cryptocurrency was valued at $477 million, according to blockchain analytics firm Elliptic.
FTX filed for bankruptcy after a wave of withdrawals crippled the exchange and sister hedge fund Alameda. Founder and former CEO Sam Bankman-Fried was indicted by federal prosecutors on charges of fraud and money laundering in December. Bankman-Fried pleaded not guilty to the charges in January, and was released on $250 million bond before his trial, which is set for October.
FTX advisors are also reviewing a $2.1 billion share repurchase payment from FTX to cryptocurrency exchange Binance in Q3 2021. Binance was the first outside investor in FTX, but Bankman-Fried noted Binance’s stake in your company in 2021.
In an appearance on CNBC in December, Binance CEO Changpeng “CZ” Zhao was asked about the potential recovery of $2.1 billion as part of FTX’s bankruptcy proceedings.
“I think we’ll leave it to the lawyers,” Zhao said, when asked if he was willing to pay back the money. “I think our legal team is perfectly capable of handling that.”
The 20-page presentation by FTX’s attorneys and consultants provides a breakdown of what FTX does and where they are looking for potential recoveries that could be returned to debtors. This includes hundreds of millions of dollars of property in the Bahamas where Bankman-Fried lived and ran the firm.
“We are making significant progress in our efforts to maximize recoveries, and it took a herculean investigative effort by our team to uncover this preliminary information,” said John Ray, who serves as FTX’s CEO during the restructuring, in the statement. on Tuesday.
Despite the separation of liquid and illiquid tokens, the filing included $529 million of self-issued tokens from FTX, FTT, among the exchange’s “liquid” assets. FTT has lost more than 90% of its value since the beginning of November.
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