Crypto Exchange FTX Recovers $5 Billion In Assets, But Shortfall In Repayment To Customers Remains Unclear
By Benzinga
Crypto exchange FTX (CRYPTO: FTT) announced it recovered a substantial amount of assets, including cash, liquid cryptocurrency and liquid investment securities, totaling more than $5 billion, Coindesk reported.
Notably, this does not include another $425 million in crypto held by the Securities Commission of the Bahamas, the report stated. This amount was reported during a hearing on Wednesday.
While this is a significant amount, it was also reported there was still an unknown sum missing that was owed to customers.
The attorney representing FTX, Adam Landis, stated the recovered assets do not include illiquid cryptocurrency tokens that cannot be sold without affecting the market.
This meant the total claims held by FTX may be even higher.
The announcement significantly increased the total claims held by FTX, as previous leadership reported only finding more than $1 billion in assets on Dec. 20, 2022.
Also Read: The Story Behind BONK Token's Meteoric Price Rise And Why Its Liquidity Fee Rate Is Unsustainable
The exact amount FTX owes to creditors was still unknown.
In initial bankruptcy filings, the company's management checked off the box indicating a figure between $1 billion and $10 billion.
Additionally, the attorney representing FTX also alleged the company's former CEO Sam Bankman-Fried instructed a lieutenant to create a "backdoor" for the exchange's trading arm, Alameda Research, to borrow from customers without their permission, creating a line of credit worth $65 billion.
This led to a "shortfall in value" to repay customers and creditors. The amount of the shortfall was not yet clear and will depend on the size of the claims pool and the recovery efforts.
FTX recently announced a cooperation agreement with the Securities Commission of the Bahamas, which was an important first step to aligning incentives and maximizing joint recoveries.
Landis added that it did not matter who collects the money for customers, as long as the customers get it.
The company established a task force with the official committee of creditors and the Bahamas JPL (joint provision liquidators) to explore alternatives for the sale or reorganization of the international platform.
Photo: Ira Lichi via Shutterstock
