FTX Bankruptcy Lawyers Reveal How Much They Have Clawed Back For Defrauded Investors

Lawyers who manage the bankruptcy of a defunct company cryptocurrency exchange FTX announced that it has recovered assets worth $5 billion to repay investors, customers and others who have been defrauded.

Ex-CEO of FTX Sam Bankman-Fried garnered controversy after users learned that he commingled funds between his exchange platform and Alameda Research, a trading firm he also controls, losing billions’ worth of assets as customers rushed to withdraw their balances. Adam Landis, an attorney working to recover funds, said that deposits were used to purchase lavish amenities and otherwise improperly enrich the company’s founders.

“We know what Alameda did with the money. It bought planes, houses, threw parties, made political donations. It made personal loans to its founders. It sponsored the FTX Arena in Miami, a Formula One team, the League of Legends, Coachella and many other businesses, events and personalities,” According to a, Landis made the comment during Wednesday’s hearing. Report Coinbase. “The amount of the shortfall is not yet clear. It will depend on the size of the claims pool and our recovery efforts. But every week we come closer to completing the work necessary to estimate recoveries for the purposes of a plan of reorganization.”

The funds were recovered in cash, liquid crypto and liquid investment securities. Landis said that the company also controls illiquid cryptocurrency reserve. “where our holdings are so large relative to the total supply that our positions cannot be sold without substantially affecting the market for the token.”

Last month, lawyers representing the company were unable to locate $1 billion worth of assets. According to bankruptcy filings, the company claimed that there was a total of $1 billion to $10 billion in assets missing. Authorities in Bahamas, where FTX, and other Bankman-Fried-led businesses were headquartered, have taken action. seized $3.5 billion of assets in the days after the company’s collapse.

The United States Attorney in the Southern District of New York Damien Williams has indicted Bankman Fried of conspiracy for wire fraud and conspiracy. Press release From the Justice Department. The entrepreneur could be sentenced to up to 115 year imprisonment. Pleading Even if other ex-executives admit guilt, they are not guilty.

Bankman-Fried was released from a bond of $250 million and is currently in permitted to stay at his parents’ home in northern California. Bankman-Fried will be allowed to hide the addresses and names of the people who secured his bond by United States District Judge Lewis Kaplan.

Customers and investors were reluctant about investing in new companies in the nascent cryptocurrency industry after the collapse of FTX. BlockFi, a lending platform, For bankruptcy Several companies like Genesis were able to continue operations days after FTX went bankrupt. Please indicate The possibility of bankruptcy. Voyager and Celsius were among the other entities that had filed for bankruptcy months ago amid a bearish digital asset market. Coinbase made this announcement this week. Retire About 20% of its employees were present for the second time within seven months.