During the proceedings, the newly appointed FTX lawyers put their analysis in front of the court. Before filing for Chapter 11 bankruptcy, the former FTX CEO, Sam Banman-Fried, reported the liquidity problems and requested to pause users’ withdrawals. The former FTX CEO attempted to make a deal with one of the major crypto exchanges, Binance, before accepting bankruptcy, which will be better for FTX users.
“Your honor, what we have is a worldwide organization that was effectively run as Sam Bnakman-Fried’s fiefdom.” said newly appointed FTX council member James Bromely.
FTX received court approval for the first-day motions. Due to the FTX Chapter 11 bankruptcy that was filed on November 11, 2022, the United States Bankruptcy Court for the District of Delaware announced FTX first-day motions today. The FTX Debtors are represented by Sullivan & Cromwell LLP as legal counsel and are assisted by Alvarez and Marsal North America, LLC as financial advisors, and Perella Weinberg Partners LP, as investment bankers.
John J. Ray III stated that “With the court’s approval of our first-day motions, we are moving forward as expeditiously as possible in our efforts to maximize value for all FTX stakeholders.”
“We will continue working to implement necessary controls and secure and marshal the company assets,” he added.
The current FTX CEO further added, “As we review the business, we have already begun receiving interest from potential buyers for our assets, and we will conduct an orderly process to recognize or sell FTX assets around the world for the benefit of stakeholders.”
The three major senators of the United States, Elizabeth Warren, Tina Smith, and Richard Durbin, stated that the recent downfall of FTX is the main reason for the $4.5 trillion asset management firm to reconsider its bitcoin offerings.
“The recent implosion of FTX, a cryptocurrency exchange, has made it abundantly clear the digital asset industry has serious problems.”
Recently, Chainalysis released data that shows the funds stolen from FTX were not sent to the Bahamas Securities Commission. Moreover, $333 million (USD) worth of FTX-related bitcoins also disappeared from the wallet. The Bahamas’ regulators also took legal action to seize the FTX’s digital assets to protect investors and users. “Urgent interim regulatory action was necessary to protect the interests of clients and creditors of FDM.”
FTX tweeted that “Exchanges should be aware that certain funds transferred from FTX Global and related debtors without authorization on 11/11/2022 are being transferred to them through intermediate wallets.”
FTX, based in the United States, increased its revenue by 1,000% between 2020 and 2021. At the end of January 2022, FTX released data that shows the company completed a $400 million (USD) series C fundraise, which resulted in increasing the valuation of FTX by up to $32 billion (USD).
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/12/09/ftx-lawyers-tell-bankruptcy-court-the-company-became-sbfs-personal-fiefdom/