A little hope for investors. The liquidators of the American cryptocurrency exchange platform FTX said on Wednesday they had recovered assets worth more than $5 billion that could be returned to the company’s customers and creditors.
These assets include cash, as well as “liquid” cryptocurrencies and financial securities, that is to say easily convertible into cash, explained one of the group’s lawyers, Andrew Dietderich, during a court hearing. Federal Corporate Bankruptcy Board, in Wilmington (Delaware), in the eastern United States.
In the document requesting the placement of FTX under bankruptcy, filed in early November, the group had quantified its liabilities between 10 and 50 billion dollars. This includes the frozen assets of platform customers, which included more than 9 million accounts according to the lawyer, as well as debts of FTX.
Sam Bankman-Fried charged with fraud
Former FTX executive Sam Bankman-Fried is accused of embezzling funds deposited by clients on the platform, to use them without their authorization in risky financial operations, mainly in cryptocurrencies, via another company, Alameda Research.
Arrested at the end of December in Nassau (Bahamas), then extradited to the United States, he was charged with fraud and criminal association by a federal judge in New York and released on bail. He faces several decades of imprisonment.
In addition to the 5 billion mentioned on Wednesday, FTX indicated that it had control of “illiquid” assets in cryptocurrencies, that is to say which cannot be sold in the short term. Concretely, this capital is denominated in very volatile digital currencies and “cannot be sold without affecting the corresponding market” and lowering the value of this currency, explained Andrew Dietderich. Added to this are the assets recovered by the liquidators of FTX in the Bahamas, the value of which was estimated at the end of 2022 at $170 million.
After an initial imbroglio, the new leaders of FTX and the Bahamian liquidators have reached an agreement, which provides that all the sums recovered, in the United States and the Bahamas, will be used to compensate customers and creditors.
With the agreement of the creditors, FTX initiated the sale of four group entities, in particular its Japanese subsidiary FTX Japan and a platform for trading financial derivatives based on cryptocurrencies, LedgerX.
FTX’s new executives are also preparing to divest more than 300 “non-strategic” investments, with a total book value of more than $4.6 billion, according to Sullivan & Cromwell’s Andrew Dietderich. The former officials of FTX and Alameda are notably accused of having used part of the embezzled funds to purchase real estate, mainly in the Bahamas.