Topline
FTX has recovered more than $5 billion in cash, easily sellable digital assets and other liquid holdings thus far, an attorney for the disgraced crypto exchange said in a Delaware bankruptcy court Wednesday, a far smaller sum than what it owes to its creditors, as lawyers and regulators look to pick up the pieces of Sam Bankman-Fried’s once-vast crypto empire.
FTX founder Sam Bankman-Fried leaving a federal court in Manhattan last week.
Key Facts
FTX is also working to liquidate another $4.6 billion in less convertible assets by “book value,” company lawyer Andrew Dietderich said Wednesday, according to several outlets, though it’s unclear how much of that book value FTX will be able to recover when selling the assets.
FTX, which owes $3.1 billion to its 50 largest creditors and at least $5 billion more to its nine million customers and smaller creditors, filed for bankruptcy November 11 between FTX and Bankman-Fried’s hedge fund Alameda Research.
It’s “not yet clear” how large the settlement fund for FTX creditors will be, according to Dietderich, noting the still significant “shortfall in value” between the company’s assets and its liabilities.
Key Background
The stunning and sudden collapse of FTX late last year landed Bankman-Fried eight federal criminal charges related to alleged fraud at FTX and Alameda, which has been accused of secretly using FTX customers’ funds for its operations. Bankman-Fried, whose net worth peaked at about $26.5 billion per Forbes’ calculations, pleaded not guilty to the charges last week. His trial will begin October 2, the judge presiding over his arraignment hearing said. Bankman-Fried faces up to 115 years in prison if found guilty on all counts. Bankman-Fried’s former top associates—Alameda’s ex-CEO and Bankman-Fried’s ex-girlfriend Caroline Ellison and FTX cofounder Gary Wang—each pleaded guilty to related charges last month, and Ellison testified she and Bankman-Fried knowingly defrauded investors.
Crucial Quote
“We know what Alameda did with the money. It bought planes, houses, threw parties, made political donations,” Dietderich said Wednesday, alluding to Bankman-Fried’s $40 million penthouse in the Bahamas and tens of millions in campaign contributions, which prosecutors allege were illegally financed by FTX customer funds.
Tangent
Filings in the Delaware bankruptcy court Tuesday revealed the star-studded list of FTX equity investors who will likely see their investments in the company once valued at $32 billion turn to zero. Billionaires Peter Thiel, Daniel Loeb, Robert Kraft and Paul Tudor Jones, Shark Tank’ Kevin O’Leary and NFL star Tom Brady and his supermodel ex-wife Gisele Bundchen are among those included in the document.
Further Reading
Exclusive: These FTX Investors Stand To Lose The Most From The Crypto Exchange’s Implosion (Forbes)
Sam Bankman-Fried Pleads Not Guilty (Forbes)
Brady, Gisele, Patriots’ Bob Kraft Among FTX Shareholders Facing Wipeout (Bloomberg)
Source: https://www.forbes.com/sites/dereksaul/2023/01/11/bankrupt-ftx-has-recouped-over-5-billion-in-liquid-assets-but-still-has-billions-more-to-go-to-meet-liabilities/