The insolvency specialists at FTX have recovered $1 billion worth of assets from numerous banks, including over $800 million in cash.
Recent reports state that the new management behind sunken crypto exchange FTX has identified new assets worth $1 billion, including $720 million in cash. This recent discovery is part of concerted efforts by the new FTX executives to claw back as much money as they can from numerous bank accounts.
Since John Ray III and his associates took over FTX from Sam Bankman-Fried, they have sought to resolve the Bahamian exchange’s insolvency. However, Ray has repeatedly stressed that the task at hand is no small feat, in large part because of poor record-keeping by his predecessors. Furthermore, the new FTX CEO and insolvency specialist previously alluded to criminal activity by Bankman-Fried and his cohorts.
New FTX Management Intimates on $1 Billion Assets Recovery at Latest Creditor Meeting
The new FTX management provided the update on the recovery of $1 billion in assets at a procedural hearing this week. Furthermore, FTX executives informed the creditor meeting that several US financial institutions would hold the funds on authorization from the US Department of Justice. In addition, Ray and his associates revealed that many other US institutions already have custody of another $500 million.
The new management stressed that it is still trying to access millions more in funds at various bank accounts to secure them. Speaking under oath during the bankruptcy proceedings, FTX’s new Chief Financial Officer, Mary Cilia, explained:
“We are reaching out to all of those banks and changing the signatories on the accounts so that we can get access to the accounts and move the cash as much as we can to an authorized depository institution.”
Cilia added that an additional $130 million remains locked up in Japan due to regulatory ringfencing. FTX Japan was reportedly the safest place to be a patron during the company’s regular operations and claims to be close to paying out customers in full. On December 13th, the subsidiary East Asian branch of the bankrupt exchange issued a statement that read:
“We have put together a plan for the resumption of withdrawal service, which has been shared with and approved by the new FTX Trading management team. Development work for this plan has already started, and our engineering teams are working to allow FTX Japan users to withdraw their funds.”
More Funds Update Breakdown
Besides the FTX Japan update, Cilia also said that another $6 million of FTX funds remains available for operational expenses, including payroll. Furthermore, she added that most of the $423 million balance retained at unauthorized US institutions is primarily at a single broker. However, the FTX CFO declined to identify the broker, instead revealing that $485 million in funds is already in an authorized deposit institution.
Amid the fund recovery exercise, ongoing efforts are trying to identify FTX’s international crypto assets and transfer them to cold wallets. According to Steve Coverick, senior director at FTX financial advisor Alvarez & Marsal, custodial providers such as BitGo would be responsible for the cold wallet shift.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge.
When he’s not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.