On January 17, 2023, FTX Trading Ltd. and related debtors disclosed and detailed that the company’s current administrators have discovered $5.5 billion in liquid assets to date. ftx top-level executives, including new CEO and Chief Restructuring Officer John J. Ray III, met with the unsecured creditors committee in the bankruptcy case to share the news.
FTX discovered $5.5 billion in liquid assets through a “Herculean investigative effort”
According to a press statement released at 2:40 p.m. EST Tuesday, FTX discovered $5.5 billion in liquid assets through a “herculean investigative effort,” a team of debtors, including FTX CEO John J. Ray III The company announced that it has identified the funds. The company’s press release details that the team found $3.5 billion in cryptocurrency assets, $1.7 billion in cash deposits, and approximately $3 million in securities.
The press release further states that before the FTX team registered its Chapter 11 filing on November 11, 2022, the team discovered $300 23 million was discovered to have been lost in an unauthorized transfer by a third party before the Chapter 11 filing was registered on November 11, 2022. In addition, the $426 million was “transferred to cold storage under the control of the Bahamas Securities Commission,” the debtor’s statement detailed.
The FTX debtor discloses that crypto assets currently held by FTX executives and the restructuring team are also stored in cold storage.” Ray explained in an update, “We have made significant progress in our efforts to maximize recovery and it took a herculean investigative effort from our team to uncover this preliminary information. ‘We ask that you understand that this information is still preliminary and subject to change. Additional information will be provided as soon as we are able to provide it.”
FTX debtors will investigate the Voyager and Brockfi transactions, as well as historical transactions involving $93 million in political contributions
A presentation shared with the Unsecured Creditors Committee is also attached to the FTX press release, which notes that the investigation “identified shortfalls on both foreign and U.S. exchanges.” In addition, the investigation “revealed the mechanisms that led to Alameda Research’s ability to borrow virtually unlimited amounts from its customers on an unsecured basis.” The Debtor’s report alleges that “a small number of individuals” had the ability to remove assets from the FTX “without being recorded on the exchange ledger.”
In addition to the $5.5 billion recovered, FTX debtors are looking at multiple avenues to maximize their recovery.