Collapsed cryptocurrency exchange FTX says it has recovered more than $5 billion in cash and cryptocurrencies it may be able to sell to help repay customers and investors, a lawyer for the company told a bankruptcy court on Wednesday. Delaware.
The firm’s advisors have identified a significant amount of cryptocurrencies that will be more difficult to sell without driving down the market price of those digital tokens, FTX attorney Andrew Dietderich said. The company is also looking to sell other “non-strategic investments” made by FTX that have a book value of $4.6 billion, he said.
It’s not yet clear how much of a shortfall FTX’s creditors will face as corporate advisors continue to work to salvage what they can from the crypto giant’s shocking implosion in November. But the company, once one of the world’s largest cryptocurrency exchanges, has identified more than 9 million customer accounts, Dietderich said, suggesting there will be an incredibly long line of people looking to get completed.
Federal regulators have estimated FTX customer losses to exceed $8 billion. John J. Ray III, the corporate liquidation expert who now leads the company, told lawmakers last month that the company won’t be able to recoup all of its losses and expects the process to take “months, not weeks.” “.
FTX co-founder Sam Bankman-Fried pleaded not guilty to eight felony counts of fraud and money laundering in federal court in Manhattan last week. Prosecutors and federal regulators accused him of orchestrating a years-long scheme to defraud the company’s clients by diverting their deposits to its affiliated investment firm, Alameda Research, and then using the funds as a personal piggy bank.
“We know what Alameda did with the money,” Dietderich told bankruptcy court Wednesday. “He bought planes, houses, threw parties, made political donations. He gave personal loans to its founders. He has sponsored the FTX Arena in Miami, a Formula 1 team, League of Legends, Coachella and many other companies, events and personalities ”.
Bankman-Fried and his inner circle have also made risky bets on cryptocurrencies, “often unsuccessfully,” Dietderich said, and have invested in a variety of businesses. “We know this has left a shortfall in value for repaying customers and creditors,” he said. “The amount of the deficit is not yet clear. It will depend on the size of the grievance pool and our recovery efforts.”