The troubled cryptocurrency exchange FTX is said to have “recovered $5 billion in cash and liquid cryptocurrencies,” as stated by an attorney who is familiar with the situation. Despite this, the exchange is “working to rebuild transaction history”. This comes excluding the additional $425 million worth of cryptocurrency that is being held by the Securities Commission of the Bahamas.
FTX Recovers $5 Billion
As previously reported by CoinGape, FTX’s total liabilities amount to $8.8 billion. The exchange was said to have limited cash and liquid digital assets at the time, which equated to an estimated $8 billion gap in its balance sheet, according to FTX’s newly appointed CEO John J. Ray III.
At the outset of Wednesday’s hearing, FTX’s attorney Andy Dietderich informed a U.S. bankruptcy judge in Delaware that:
We have located over $5 billion of cash, liquid cryptocurrency and liquid investment securities measured at petition date value. Our holdings are so large relative to the total supply that our positions cannot be sold without substantially affecting the market for the token.
Although the company’s finances have been labeled as inaccurate, Dietderich states that the organization has plans to liquidate non-strategic holdings that have a valuation of $4.6 billion. On the other hand, while speaking about seized assets by the Bahamian authorities, the FTX attorney estimated the assets to be worth as little as $170 million; which the government body touted to be as high as $3.5 billion. According to Dietderich, the majority of the confiscated assets are made up of FTX’s proprietary and illiquid FTT crypto token, the value of which is subject to extreme price swings.
The FTX Fiasco
In November, the company submitted its petition for bankruptcy, and in December, prosecutors in the United States accused Bankman-Fried of masterminding an “epic” fraud that may have cost investors, consumers, and lenders billions of dollars. Currently, the insolvent firm’s advisers and attorneys are attempting to recoup funds in order to pay back creditors.
The discredited FTX founder Sam Bankman-Fried recently entered a not-guilty plea to all charges stemming from the exchange’s failures. An “FTX Task Force” has been established by the Southern District of New York Office to track & recover lost customer assets and also to manage legal actions connected to the collapse of the exchange.