Half of the $181 million value of assets identified by FTX US, the U.S.-based arm of Sam Bankman-Fried’s bankrupt crypto empire, was “subject to unauthorized third-party transfers” following its bankruptcy filing, in keeping with a presentation made to the FTX creditor committee today.
It’s taken a “Herculean investigative effort for our team to uncover this preliminary information,” newly appointed FTX CEO John Ray said in an announcement concerning the meeting.
Unauthorized transfers from the principal exchange, FTX.com, made headlines as tons of of tens of millions of dollars were drained the day after the corporate filed for Chapter 11 bankruptcy protection on November 11. However the $90 million that was moved from FTX US had not been disclosed by the corporate until now.
Of the remaining FTX US assets, $88 million has been moved right into a cold storage wallet and one other $3 million is pending transfer to the wallet, in keeping with the FTX presentation.
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“The assets identified as of the Petition Date [the day the company filed for bankruptcy] are substantially lower than the mixture third-party customer balances suggested by the election ledger for FTX US,” the restructuring team said in an announcement.
A graphic from the presentation indicated that FTX believes $415 million value of crypto assets were hacked from accounts belonging to the exchange. Of those hacked funds, $323 million were from FTX.com and one other $90 million from FTX US, in keeping with the presentation. One other graphic showed that $1.6 billion value of Alameda’s funds remain in a “hot” crypto wallet, meaning that they are being held at an address where they may hypothetically be moved or traded, and is otherwise accessible online.
FTX, Bankman-Fried’s vast crypto empire, fell in early November due to a report that its trading desk, Alameda Research, held billions value of FTX’s exchange token FTT against billions value of liabilities. If Alameda had sold its FTT to repay creditors, it will have crashed the token’s price.
As customers rushed to withdraw their funds, FTX needed to shut down its exchange and entertained a takeover bid from competitor Binance before the corporate backed out, after which finally filed for bankruptcy. Bankman-Fried was later arrested and charged with eight financial crimes, and now awaits trial in Recent York scheduled for October of this 12 months.
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Greater than 130 entities, including Alameda Research and FTX US, filed for bankruptcy together with FTX.com.
But as recently as last week, Bankman-Fried claimed through his latest Substack newsletter that FTX is “fully solvent.” He writes that the corporate had $350 million in money when he resigned as CEO, the identical day FTX filed for bankruptcy.
He’s now facing criminal charges, including money laundering and wire fraud, from federal prosecutors. He pleaded not guilty to all of them earlier this month. While Bankman-Fried awaits his trial, scheduled to start in October, he’s under house arrest at his parents’ home in Palo Alto, California.
The small print about FTX US assets were shared in a slide deck prepared with the Official Committee of Unsecured Creditors on Monday.
In it, FTX’s restructuring team also said it has identified $5.5 billion value of liquid assets to day, including $1.7 billion in money, $3.5 billion in cryptocurrencies and one other $300 million value of liquid securities. The totals echo what lead attorney Adam Landis said during a court hearing last Wednesday.
Editor’s note: This text and its headline were updated to make clear that FTX has disclosed that $90 million value of assets were moved from FTX US via “unauthorized third-party transfers.”