Attorney Says FTX Has Recovered $5 Billion In Assets

By Kevin • January 12, 2023 3:04 pm • Comments

It looks like the failed crypto exchange FTX has managed to recover around $5 billion in liquid assets according to attorneys close to the case.

This means that customers may have a small chance of getting a portion of their assets back, but it is still unknown exactly how much of it will be recovered.

Currently, the new leadership team of FTX also has plans to liquidate a lot of assets that it considers non-essential in order to increase the amount of liquid assets that the company holds.

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With this being said, there is still a lot that is unknown when it comes to the current financial situation of FTX and it seems likely that FTX will not be able to return the full value of customer funds.

After all, the CFTC had mentioned earlier that it estimates that FTX is missing more than $8 billion of customer funds.

Reuters.com reports:

Dietderich said the $5 billion recovered does not include assets seized by the Securities Commission of the Bahamas, where the company was headquartered and Bankman-Fried resided.

FTX’s attorney 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 comprised of FTX’s proprietary and illiquid FTT token, which is highly volatile in price, Dietderich said.

FTX could raise additional funds in the coming months for the benefit of customers after Dorsey approved FTX’s request for procedures to explore sales of affiliates at Wednesday’s hearing.

It seems that the company also wants to start selling a lot of its companies in order to gather more funds, but has been prevented from doing so until the FTX fraud case has been completed.

Currently, SBF has been released due to a $250 million bail and has also been accused of transferring crypto funds while he is under arrest.

However, on Twitter, SBF claims that it was not him who did the transfers and stated that he did not have access to the FTX wallets anymore.

Despite the possibility of some funds being recovered, the collapse of FTX has already done some reputational damage on the crypto industry and may encourage law makers to revise the way the industry is regulated.

If anything, how the SEC enforces regulation should definitely be revised as it is clear that the actions of the SEC have failed to protect many investors.

CoinDesk reports:

Chief Financial Officer Mary Cilia estimated in December the company could complete that work by April. However, Judge John Dorsey of the Delaware Bankruptcy Court set a March 15 deadline in Wednesday’s hearing. Brian Glueckstein of Sullivan & Cromwell said there may be as many as 9 million creditors, echoing a figure made by Kevin Cofsky, a partner with Parella Weinberg Partners, a financial advisory firm.

Landis also spoke about a recently announced cooperation agreement with the Securities Commission of the Bahamas, saying it was “an important first step to align incentives and maximize joint recoveries.”

“It does not matter who collects $1 for customers, as long as the customers get it,” Landis said.

“We’ve established a task force with the official committee of creditors and the Bahamas JPL to explore alternatives for the sale or reorganization of the international platform.”

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