Cointime

Download App
iOS & Android

FTX Discovers $5.5B in Liquid Assets — Debtors Explore Ways to Maximize Recovery via Potential Sale of Subsidiaries, Real Estate

Validated Individual Expert

On Jan. 17, 2023, FTX Trading Ltd. and affiliated debtors updated the public and detailed that the firm’s current administrators have discovered $5.5 billion of liquid assets to date. Top-level executives, including the new FTX CEO and chief restructuring officer, John J. Ray III, met with the bankruptcy case’s committee of unsecured creditors to share the news.

FTX Uncovers $5.5 Billion in Liquid Assets Through ‘Herculean Investigative Effort’

FTX has discovered $5.5 billion in liquid assets, according to a press statement released at 2:40 p.m. Eastern Time, Tuesday. The debtors, including FTX CEO John J. Ray III, announced that the team identified the funds through a “herculean investigative effort.” The company’s press release details that the team found $3.5 billion in cryptocurrency assets, $1.7 billion in cash deposits and roughly $3 million in securities.

The new FTX CEO and chief restructuring officer John J. Ray III.

The press release further noted that the FTX team discovered $323 million was lost to unauthorized third-party transfers before the Chapter 11 bankruptcy filing was registered on Nov. 11, 2022. Furthermore, $426 million “was transferred to cold storage under the control of the Securities Commission of The Bahamas,” the debtors’ statement details.

Screenshot of the FTX debtors’ presentation to the committee of unsecured creditors.

FTX debtors disclose that crypto assets currently held by FTX executives and the restructuring teams are also held in cold storage. “We are making important progress in our efforts to maximize recoveries, and it has taken a Herculean investigative effort from our team to uncover this preliminary information,” Ray explained in the update. “We ask our stakeholders to understand that this information is still preliminary and subject to change. We will provide additional information as soon as we are able to do so.”

FTX Debtors Investigate Historical Transactions, Including Voyager and Blockfi Deals, and $93M in Political Donations

The presentation shared with the committee of unsecured creditors is also attached to the FTX press release, and it notes that an investigation “confirmed shortfalls at both international and U.S. exchanges.” Furthermore, the investigation “uncovered the mechanics behind how Alameda Research had the ability to borrow without collateral effectively unlimited amounts from customers.” The debtors’ report insists that a “small group of individuals” had the ability to remove assets from FTX without it ever being “recorded on the exchange ledger.”

Screenshot of the FTX debtors’ presentation to the committee of unsecured creditors.

In addition to the recovered $5.5 billion, FTX debtors are exploring multiple facets to maximize the recovery process through the “potential sale” of four subsidiaries. The team is exploring ways to monetize the hundreds of investments made that currently hold a book value of around “$4.6 billion.”

Screenshot of the FTX debtors’ presentation to the committee of unsecured creditors.

FTX debtors want to maximize recovery by “marketing real estate in the Bahamas,” and investigators aim to probe “all historical transactions” related to the business.

Screenshot of the FTX debtors’ presentation to the committee of unsecured creditors.

The real estate owned by the inner circle is worth around $205.5 million, stretched across 27 different properties located in The Bahamas. The historical transactions being investigated involve the Voyager and Blockfi deals, alongside $93 million worth of political donations FTX executives made between March 2020 and November 2022.

“Hundreds of [mergers and acquisitions] M&A and other transactions under review,” the presentation explains. The presentation also gives a detailed visual map of how the inner circle, mostly Alameda Research, could “withdraw assets without [a] record on the exchange ledger.”

FTX
Comments

All Comments

Recommended for you

  • Canada Revenue Agency to Chase Crypto Tax Evaders for $39.5 Million in Suspected Unpaid Taxes

    According to the Canada Revenue Agency (CRA), nearly 400 audits have been launched to curb cryptocurrency tax evasion, with the aim of recovering CAD 54 million (approximately USD 39.5 million) in suspected unpaid taxes.

  • Ethereum L2 TVL is $38.59 billion, a 7-day increase of 3.62%

    According to L2BEAT data, the current Ethereum Layer2 TVL is $38.59 billion, with a 7-day increase of 3.62%. The top five TVLs are:

  • Brazil to Treat Foreign Crypto Purchases from Crypto Exchanges as Imports

    Brazil will consider purchasing cryptocurrency from foreign exchanges as imports, breaking its previous record and adding weight to Brazil's trade balance. In the past 12 months, cryptocurrency purchases have reached $14.84 billion, up from $12.3 billion last year. Similarly, in the first quarter of 2024, cryptocurrency imports reached $4.69 billion, a 118% increase from the first quarter of 2023.

  • CertiK: The group that stole 1,155 WBTC dispersed the exchanged ETH 8 hours ago

    CertiK stated on social media that the system detected fund transfers from a fraudulent wallet, which can be traced back to a phishing incident on May 3rd where an address lost 1155 WBTC due to malicious address transactions. Starting from 8 hours ago, the scammer continuously split and dispersed the exchanged ETH from the initial address. Previously, the address that stole 1155 WBTC had exchanged the coins for 22960 ETH.

  • The total open interest of ETH contracts is $10.55 billion

    Coinglass data shows that the total open position of ETH futures contracts on the entire network is 3.48 million ETH, equivalent to approximately 10.55 billion US dollars. Among them, the open position of Binance ETH contracts is 1.15 million ETH (approximately 3.5 billion US dollars), ranking first.

  • The total open interest of BTC contracts on the entire network is $30.03 billion

    According to Coinglass data, the total open position of BTC futures contracts on the network is 477,910 BTC, equivalent to approximately 30.03 billion US dollars.

  • Chairman of the U.S. SEC: The crypto market is a hotbed of fraud, and investors are not getting the necessary information disclosure on related assets

    According to CNBC, Gary Gensler, the chairman of the US Securities and Exchange Commission (SEC), stated in an interview that the SEC oversees $110 trillion in capital markets, with approximately half in the stock market and half in the bond and other markets. Cryptocurrency is only a small part of the entire market. However, it is a huge part of fraud, deception, and problems in the market, as most of the content in this field does not comply with securities law protection.The SEC cannot talk to any company, but in the field of crypto assets, without prejudging any of them, according to the US Supreme Court's interpretation, many tokens are securities under local law, so we comply with this law, and investors do not receive the necessary information disclosure about these assets.

  • Lava Foundation Completes $11 Million Funding

    Lava Foundation, the developer of modular blockchain network Lava, announced the completion of a $11 million financing round. Participants included Animoca Brands, Gate.io Ventures, CoinGecko Ventures, Polygon co-founder Sandeep Nailwal, Ash Crypto, CryptoLark, and media outlets Crypto Times Japan, Le Journal Du Coin and The Rollup. It is reported that the mainnet launch and airdrop are expected to take place in the coming months.

  • Canada Revenue Agency steps up crackdown on virtual asset tax evasion

    The Canadian Revenue Agency (CRA) has announced that it has begun auditing about 400 cases and will strengthen its crackdown on virtual asset tax evasion. The Canadian Revenue Agency plans to recover approximately $39.5 million in suspected unpaid taxes related to virtual assets. The Canadian Revenue Agency explained that there is an urgent need to strengthen public education on tax obligations related to virtual assets, and the goal of strengthening the crackdown on tax evasion is to ensure that all taxable cryptocurrency transactions are accurately and transparently reported. Previously, Canada announced plans to implement the Cryptocurrency Asset Reporting Framework (CARF) of the Organization for Economic Cooperation and Development (OECD) by 2026. CARF is a tax standard designed to address virtual asset tax evasion issues, and its updated version stipulates that it can collect virtual asset transaction information outside its jurisdiction.

  • CFTC Chairman: Cryptocurrencies face an inevitable wave of enforcement actions

    As the US Securities and Exchange Commission (SEC) continues to review participants in the cryptocurrency industry including Robinhood, Binance, Coinbase, and Ripple, Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam has warned that enforcement actions are on the rise. Behnam emphasized the lack of regulatory frameworks and transparency in the constantly evolving cryptocurrency industry, which he believes will inevitably lead to more cases of fraud and manipulation. Behnam expects a "cycle of enforcement actions" in the next six months to two years, driven by the rapid appreciation of digital assets and strong interest from retail investors. In addition, Behnam believes that without proper regulation, fraud and manipulation will continue to persist.