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    FTX collects $5 billion in cash and crypto to pay customers

    Byzora

    Jan 11, 2023

    Disrupted cryptocurrency exchange FTX said it has recovered more than $5 billion in cash and crypto assets that it could sell to help customers repay customers and investors, a lawyer for the company said on Wednesday.

    The company’s advisers have identified large amounts of crypto that would be difficult to sell without damaging the market value of those digital tokens, said FTX attorney Andrew Dietderich. The company is also trying to sell “other non-strategic funds” made by FTX that have a book value of $4.6 billion, he said.

    It is not clear how much FTX’s shareholders will face as the company’s advisers continue to try to save what they can from the crypto giant’s November upset. But the company, one of the largest cryptocurrency exchanges in the world, has found more than 9 million customer accounts, Dietderich said, suggesting that there will be an incredibly long line of people seeking treatment.

    Federal regulators have estimated that FTX’s customer losses exceed $8 billion. John J. Ray III, the liquidation expert who now runs the company, told lawmakers last month that the company would not 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 criminal charges of fraud and money laundering in Manhattan federal court last week. Federal and state prosecutors accused him of orchestrating a years-long scheme to defraud the company’s clients by diverting their money to his affiliated investment firm, Alameda Research, and using the funds the body is like a personal piggy bank. .

    “We know what Alameda did with the money,” Dietderich told the bankruptcy court on Wednesday. “He bought airplanes, houses, threw parties, made political donations. He made personal loans to the founders. He hosted the FTX Arena in Miami, the Formula 1 team, the League of Legends, Coachella and many other companies, events and people.

    Bankman-Fried and his team also made risky cryptocurrency bets, “when it didn’t work out,” Dietderich said, and invested in various businesses. “We know that all this has left little money to pay customers and creditors,” he said. “The extent of the shortfall is unknown. It will depend on the size of the lake in question and our recovery efforts.”

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