01-11-2023 icon

FTX recovers $5 billion in assets, bankruptcy attorney says

By Lucy Adegbe

A bankruptcy attorney has said crypto exchange FTX has recovered more than $5 billion in different assets, excluding another $425 million in crypto held by the Securities Commission of the Bahamas.

Landis Rath & Cobb attorney Adam Landis who spoke on FTX’s behalf Wednesday said there is still a sum missing in what is owed to customers and the amount is still unclear.

“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,” Landis said 

The announcement now increases the total FTX claims it holds, after the company’s new leadership said it could only find just over $1 billion on Dec. 20, 2022. 

It is unclear how much FTX owes its creditors. It will be recalled that in initial bankruptcy filings, the company’s management checked off the box indicating a figure between $1 billion and $10 billion.

Landis said Sam Bankman-Fried instructed his lieutenant, Gary Wang, to create a “backdoor” for Alameda to borrow from FTX customers without their permission. He added the former CEO created a line of credit worth $65 billion from the exchange to the trading arm.

The Attorney said, “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.”

He added that this has led to a “shortfall in value” to repay customers and creditors.

Meanwhile, the Chief Financial Officer Mary Cilia estimated in December the company could complete that work by April. However, Judge John Dorsey of the Delaware Bankruptcy Court set a March 15 deadline in Wednesday’s hearing. Brian Glueckstein of Sullivan & Cromwell said there may be as many as 9 million creditors, echoing a figure made by Kevin Cofsky, a partner with Parella Weinberg Partners, a financial advisory firm.