FTX Trading Ltd., the giant crypto exchange company forced to file for bankruptcy in November 2022, has reportedly located more than five billion dollars worth of assets.
FTX has been in hot water since a mass exodus of its users took place last November. Thousands of customers attempted to withdraw their assets when rumors emerged that the company’s finances were on shaky ground. However, FTX was unable to meet customer demands for withdrawals.
Since then, the company has declared bankruptcy, and its founder and CEO, Sam Bankman-Fried, was arrested for fraud-related offenses. The collapse of FTX has been yet another blow to the crypto industry, which has been plagued with uncertainty in recent years.
FTX locates $5 billion
“We have located over 5 billion dollars of cash, liquid cryptocurrency and liquid investment securities,” said Andy Dietderich, an attorney for FTX. US Judge John Dorsey is presiding over the case in a bankruptcy court in Delaware.
Dietderich added that the recovered assets do not include those seized by the Securities Commission of the Bahamas. FTX was based in the Bahamas when Bankman-Fried was arrested in December of last year.
Federal prosecutors recently announced that they are planning to seize at least five hundred million dollars worth of assets connected to FTX as they continue to prosecute the fallen crypto empire.
For FTX customers who were unable to withdraw their assets, the recent recovery of five billion dollars will provide some hope that they will be compensated.
John J. Ray, who replaced Bankman-Fried as CEO of the company and was brought in as a liquidator in November, recently said that at least eight billion dollars of customer assets remained unaccounted for in what he described as the “worst” case of corporate mismanagement he had ever seen.
The rise and fall of a crypto empire
At its peak, FTX was the third-largest cryptocurrency exchange in size. Bankman-Fried, who founded the company, was nicknamed “the King of Crypto.”
However, the company was forced into bankruptcy when it emerged that an eight billion dollar hole existed in its accounts. A court filing issued in November revealed that FTX owed its fifty largest creditors almost $3.1 billion.
For the thirty-year-old founder of the company, FTX’s downfall also amounted to a dramatic shift in his personal fortune. As recently as late October of last year, Bankman-Fried had a net worth estimated at more than fifteen billion dollars. However, the young entrepreneur now faces personal and financial ruin.
The Department of Justice and the Securities and Exchange Commission soon began investigating Bankman-Fried. On December 12, 2022, he was arrested in the Bahamas for fraud and was later extradited to the US.
The FTX founder now faces a wide array of charges, including wire fraud, commodities fraud, securities fraud, money laundering, and campaign finance law violations. He could be sentenced to a maximum of 115 years in prison.
Bankman-Fried pleaded not guilty to all charges and is currently free on a $250 million bond, the largest in the history of US criminal proceedings.