On January 17, 2023, FTX Trading Ltd. and Affiliated Debtors informed the public and clarified that the company’s current administrators have uncovered $5.5 billion in liquid assets to date. High-level executives, including FTX’s new CEO and chief restructuring officer, John J. Ray III, met with the bankruptcy filing’s unsecured creditors committee to share the news.
FTX Uncovers $5.5 Billion in Liquid Assets Through ‘Herculean Investigative Effort’
FTX uncovered $5.5 billion in liquid assets, according to a news release at 2:40 p.m. EST Tuesday. The debtors, including FTX CEO John J. Ray III, said 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 approximately $3 million in securities.
The press release further noted that the FTX team discovered that $323 million was lost to unauthorized third-party transfers before the November 11, 2022, Chapter 11 bankruptcy filing was filed. , $426 million “was transferred to cold storage under the control of the Bahamas Securities Commission,” the debtors’ statement details.
FTX Debtors reveal that crypto assets currently held by FTX executives and restructuring teams are also kept in cold storage. “We are making significant progress in our efforts to maximize recoveries, and it took 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 historic deals, including Voyager and Blockfi deals, and $93 million in political donations
The presentation shared with the committee of unsecured creditors is also attached to FTX’s press release, and it notes that an investigation “confirmed shortcomings on international and US exchanges.” In addition, the investigation “unveiled the mechanisms underlying Alameda Research’s ability to borrow effectively unlimited amounts from customers without collateral.” The debtors’ report insists that a “small group of individuals” had the ability to withdraw assets from FTX without it ever being “recorded in the exchange’s ledger.”
In addition to the $5.5 billion recovered, 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”.
FTX debtors want to maximize recovery by “marketing real estate in the Bahamas”, and investigators aim to probe “all historical transactions” related to the company.
The real estate belonging to the inner circle is worth approximately $205.5 million, spread over 27 different properties located in the Bahamas. The landmark deals studied involve the Voyager and Blockfi deals, as well as $93 million in political donations that FTX executives made between March 2020 and November 2022.
“Hundreds of [mergers and acquisitions] Mergers and Acquisitions and Other Transactions Under Review,” explains the presentation. The presentation also gives a detailed visual map of how the inner circle, primarily Alameda Research, could “remove assets without [a] registration in the exchange register.
What do you think of FTX’s efforts to maximize recovery and uncover the truth behind unauthorized transfers and historical transactions? Share your ideas in the comments below.
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