FTX says it has recovered more than $5 billion in assets
Bankruptcy attorney revealed
Bankrupt crypto exchange FTX said it has recovered more than $5 billion in cash and other liquid assets.
Those assets are valued as of FTX’s bankruptcy filing in November, and don’t include $425 million held by the securities regulator in the Bahamas, the firm’s lead attorney said during a hearing on Wednesday.
"We have located over $5 billion of cash, liquid cryptocurrency and liquid investment securities measured at petition date value. [It] just does not ascribe any value to holdings of dozens of illiquid cryptocurrency tokens, where our holdings are so large relative to the total supply that our positions cannot be sold without substantially affecting the market for the token," said Landis Rath & Cobb attorney Adam Landis on FTX's behalf.
Sam Bankman-Fried instructed his FTX cofounder Gary Wang to create a “secret backdoor” to enable Alameda Research to borrow from FTX customers without their permission, the attorney said.
According to Landis, the former CEO created a line of credit worth $65 billion from the exchange to his trading firm.
"We know what Alameda did with the money. It bought planes, houses, threw parties, made political donations. It made personal loans to its founders. It sponsored the FTX Arena in Miami, a Formula One team, the League of Legends, Coachella and many other businesses, events and personalities," Landis said.
He noted that this led to a "shortfall in value" to repay customers and creditors.
"The amount of the shortfall is not yet clear. It will depend on the size of the claims pool and our recovery efforts. But every week we come closer to completing the work necessary to estimate recoveries for the purposes of a plan of reorganization," he added.
Landis also addressed FTX’s recent cooperation agreement with the Securities Commission of the Bahamas, stating 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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