John Ray, CEO of FTX Cryptocurrency Derivatives Exchange, arrives at bankruptcy court in Wilmington, Delaware, USA, on Tuesday, November 22, 2022.
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FTX has recovered more than $5 billion in liquid assets, including cash and digital assets, attorneys in Delaware bankruptcy court said during an FTX bankruptcy Hearing Wednesday.
The news comes after federal prosecutors announced plans to seize at least $500 million worth of assets related to FTX as part of its ongoing prosecution against FTX co-founder Sam Bankman-Fried.
The recovery will be a boon for FTX clients after the cryptocurrency exchange crashed in November. FTX's new CEO, John J. Ray, has previously testified that at least $8 billion in client assets went unaccounted for in the "worst" case of corporate control he has ever seen.
The $5 billion figure does not include any illiquid cryptocurrency assets, FTX attorney Adam Landis told the court. He said the company's holdings are so large that selling them would hit the market substantially, reducing their value.
FTX's collapse was related, among other things, to the failure to correctly mark illiquid assets on the market. FTX executives, including Bankman-Fried and Alameda Research CEO Caroline Ellison, borrowed against the value of the FTX-issued FTT token. Alameda controlled the vast majority of the FTT coins in circulation, similar to a fleet of publicly traded companies, and could not have liquidated his position at full book value.
Correction: This article was updated to reflect that FTX attorney Adam Landis told the court the $5 billion figure. does not include any illiquid cryptocurrency assets.
