Lawyers have uncovered assets totaling $5 billion at the bankrupt crypto exchange FTX, giving hope to customers and creditors.
$5 Billion Found in Bankrupt FTX
Cash, cryptocurrency, and liquid securities were among the assets found. The law firm Sullivan & Cromwel believes FTX may be able to raise 4.6 billion euros (which equates to a value of 5 billion USD) from selling additional assets, but it is too soon to tell how much customers may get back.
The search for Sam Bankman-Fried’s “legacy” has been ongoing since FTX collapsed in November 2022 into bankruptcy. FTX’s books and records turned out to be sloppy or not created at all, its new director general stated.
FTX Bankruptcy Puts 9 Million Customers in Line for Repayment
With finding $5 Billion in FTX assets, over nine million people who used FTX are now hoping for a payout from the collapsed crypto exchange. At the end of December, they filed a lawsuit against the bankrupt company. Meanwhile, insolvency administrators in the Bahamas and Antigua are fighting over what’s left of the assets. They do this in collaboration with and administrators of another insolvent crypto company, Blockfi.
The plaintiffs want to ensure that the customer’s money isn’t given to FTX or Almeda. If the court decides that the crypto companies own the funds, customers will be first in line for repayment over other creditors. Crypto companies aren’t as regulated as US banks and brokers, so your deposits aren’t guaranteed. This raises the question of who owns the funds – the company or the customers.
Bankman-Fried Accused of Diverting $10 Billion
FTX founder Sam Bankman-Fried has denied allegations that the firm went bankrupt in November after rumors of shady behavior rocked the crypto world. The company’s structure was based on a particular cryptocurrency with no equivalent, and customers needed more faith and wanted to get their money out. Consequently, the second biggest cryptocurrency trading platform must pay billions in customer funds.
30-Year-Old Bankman-Fried Arrested and Extradited to US
FTX founder Bankman-Fried denied accusations that the company slid into bankruptcy in November due to rumors of shady dealings. It was revealed that the platform mainly held clients’ funds in a cryptocurrency with no equivalent, leading many customers to want to withdraw their funds. It was reported that the second-largest crypto trading platform sometimes failed to pay out billions in customer funds.
Bankman-Fried was seen as an exception in the industry until recently, with US business media such as Fortune celebrating him. But it was alleged he had secretly diverted ten billion dollars. As a result, he was accused of fraud and money laundering in the US, which he denied. In December, the 30-year-old (born in 1992) was arrested in the Bahamas and extradited to the US.