FTX Recovers $5B Worth of Liquid Assets, Might Consider Sale

UTC by Bhushan Akolkar · 3 min read
FTX Recovers $5B Worth of Liquid Assets, Might Consider Sale
Photo: Depositphotos

This recovery in assets could be a major boon for FTX’s customers who have their massive crypto investments frozen after the bankruptcy filing.

In a major announcement on Wednesday, January 11, FTX attorney Andy Dietderich announced that the troubled crypto exchange “recovered $5 billion in cash and liquid cryptocurrencies”.

This development comes as the federal prosecutors announced the seizure of nearly $500 million in Robinhood stock owned by Sam Bankman-Fried. This recovery will be a major boon for FTX customers who are suffering from the collapse of the exchange in November 2022.

Previously, the newly appointed FTX CEO John J. Ray had attested $8 billion worth of liquid customer assets. He said that this is the worst the most murkier case of corporate control he had ever seen.

Currently, crypto exchange FTX is still working to build the transaction history. Additionally, the total number of customer shortfalls is also unclear. However, these recovered assets don’t include those seized by the Bahamian Securities and Exchange Commission (SEC) which majorly comprises FTX’s native token FTT.

Speaking to the US bankruptcy judge on Wednesday, FTX attorney Dietderich mentioned that the exchange is looking to sell $4.6 billion worth of non-strategic investments. This also includes the sale of its four major subsidiaries including LedgerX, FTX Japan, FTX Europe, and Embed. Due to their segregated accounts, all these companies are independent of FTX. In his address, FTX attorney Dietderich added:

“We are engaged in a complex effort now to recreate petition date claim values for every customer. We are building financial statements from the ground up using the general ledger and bank transaction records rather than the previous incomplete and unreliable financial statements of the debtors. This will put us in the position to describe the financial results of the debtors accurately for the first time.”

FTX Core Exchange Sale

During its bankruptcy process, FTX could consider selling its core exchange. “We have already initiated a review of a reorganization of the core exchange, and that process is ongoing,” said Kevin Cofsky, a partner at FTX’s proposed investment bank Perella Weinberg Partners.

During a lengthy hearing on Wednesday, lawyers appeared before Judge John Dorsey to discuss whether to redact the names of the firm’s nine million customers. After hearing the arguments, Dorsey has decided to keep most creditors’ and customers’ names private for at least three months. The Judge added that those people and entities could face privacy concerns if their names are made public.

“I want to make sure I’m doing the right thing,” Dorsey said. “We have a list of people who may be customers, may be creditors, may be both, and I don’t know which is which.”

Furthermore, Cofsky also suggested that revealing the names of the customers might reduce the value of the company since they could be solicited by other crypto firms. FTX attorney Brian Glueckstein asked Judge Dorsey to redact customers’ names and addresses for six months.

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Bhushan Akolkar

Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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