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FTX: it took ‘Herculean investigative effort’ to identify $5.5B in liquid assets

January 17, 2023No Comments


The debtors behind FTX identified $5.5 billion in liquid assets, but reported a “substantial shortfall of digital assets” at the bankrupt crypto exchange and its American arm.

In a January 17 announcement, FTX saying had identified $1.7 billion in cash, $3.5 billion in crypto assets and $0.3 billion in securities after the company filed for Chapter 11 bankruptcy in November. The debtors added that they had identified approximately $1.6 billion in digital assets associated with FTX.com, including approximately $426 million being held by the Bahamas Securities Commission — and $181 million connected to FTX US.

"We are making significant progress in our efforts to maximize recoveries, and it has taken a Herculean investigative effort for our team to uncover this preliminary information," said FTX CEO John Ray. "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 can."

The debtors added that of the $1.6 billion associated with FTX.com, they controlled $742 million of cold storage assets and another $121 million would be available, pending transfer. Of FTX US, debtors held $88 million in cold storage, with $3 million pending transfer.

The FTX bankruptcy case, currently pending in the District of Delaware, revealed in november that the company owed more than $3 billion to its top 50 creditors – there may be more than a million creditors with claims to assets on the crypto exchange. Legal proceedings since January suggested that FTX it had "recovered $5 billion in cash and liquid cryptocurrency," but the company could still have up to $8.8 billion in total liabilities.

“Based on current estimates of the number of digital assets associated with the FTX.com and FTX US exchanges as of the date of the petition, there is a substantial shortfall of digital assets on both exchanges,” the debtors said.

Related: Former FTX USA president lashes out at 'unsafe' SBF in 49-part Twitter thread

Former FTX CEO Sam Bankman-Fried, who published a "pre-mortem summary" of the cryptocurrency exchange's insolvency on Jan. 12, he claimed that FTX US was “fully solvent” and capable of making its users whole. He added at the time that if FTX International were to “reboot”, it might be possible for the exchange to repay clients with available assets. Bankman-Fried faces eight criminal charges in the FTX case, including for alleged violations of campaign finance laws and wire fraud.