FTX filed for Chapter 11 bankruptcy because the exchange failed to fulfill the withdrawal demands of consumers. For his involvement in all the fiasco, SBF was subsequently slapped with various charges by the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and the US Department of Justice (DOJ). Since then, the crypto community has been eagerly awaiting a verdict on the case.
The FTX collapse was one of the vital shocking incidents within the history of cryptocurrencies. FTX, founded by ex-CEO Samuel Bankman-Fried (SBF), was the second-largest centralised cryptocurrency exchange on this planet, handling billions of dollars’ value of user funds.
Nevertheless, on November 11, 2022, FTX filed for Chapter 11 bankruptcy because the exchange failed to fulfill the withdrawal demands of consumers. For his involvement in all the fiasco, SBF was subsequently slapped with various charges by the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and the US Department of Justice (DOJ). Since then, the crypto communiFTX filed for Chapter 11 bankruptcy because the exchange failed to fulfill the withdrawal demands of consumers. For his involvement in all the fiasco, SBF was subsequently slapped with various charges by the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and the US Department of Justice (DOJ). Since then, the crypto community has been eagerly awaiting a verdict on the case.ty has been eagerly awaiting a verdict on the case.
At the identical time, tons of of hundreds of investors are paying close attention to the court proceedings, wondering if they may ever get any of their funds back. Fortunately, prosecutors on the case and FTX’s restructuring team have managed to seize/get better a big amount of funds linked to the exchange and its founder, SBF. Here’s a take a look at a few of these seized/recovered funds and what they mean for investors of the ill-fated crypto exchange.
Robinhood shares seized
Federal prosecutors revealed that, between January 1 and January 20, they’d seized greater than $698 million value of funds tied to FTX founder, Sam Bankman-Fried. These findings were released as a part of a January 20 court filing submitted by US Attorney Damian Williams.
Many of the seized funds consisted of Robinhood stock; 55.3 million shares to be precise, that are value roughly $525 million at current prices. These shares were held by an Antigua-based shell company called Emergent Fidelity Technologies, which was arrange by SBF and FTX co-founder Gary Wang.
Prosecutors also seized accounts containing $100 million and $50 million held by Silvergate Bank and Farmington State Bank respectively. These accounts were allegedly affiliated with FTX Digital Markets, FTX’s Bahamas-based business.
Restructuring team claws back $5.5 billion
In one other positive development, FTX’s restructuring team stated that they were in a position to get better $5.5 billion in money, crypto holdings and other assets. These details were released by FTX’s lead attorney Adam Landis as a part of a January 11 court hearing in Delaware.
In line with Landis, nearly $3.5 billion of the recovered funds consisted of crypto assets, including $268 million in BTC, $245 million in stablecoins and $42 million value of Dogecoin. The lawyers also stated that $1.2 billion dollars’ value of FTX’s crypto assets were held at other crypto exchanges.
The restructuring team also stated that these crypto assets could be easily converted for money. Nevertheless, the dimensions of the holdings was so large that they may influence prices if sold on the open market.
FTX gets the nod to dump regional outfits and other subsidiaries
On January 13, a judge overseeing the FTX proceedings gave the restructuring team the go-ahead to sell a few of its subsidiaries and regional arms. These include FTX Japan and FTX Europe, together with equities-trading platform Embed Technologies and derivatives exchange, LedgerX LLC.
The court placed the investment bank, Perella Weinberg, accountable for the sale process. It also set bid deadlines of January 18, January 25 and February 1 for Embed, LedgerX and the opposite two FTX arms, respectively. In line with Kevin Cofsky, a partner at Perella, the investment bank had received bids from nearly 120 interested parties. The sale of those assets is predicted to bring a big amount of funds back into FTX coffers.
But will it’s enough to cover customer debt?
In line with estimates, there are over nine million FTX customers who’re owed between $1 billion and $10 billion collectively. If these estimates are to be believed, the recovered/seized amounts don’t come near the debt owed.
Nevertheless, it has only been a few months since FTX filed for bankruptcy. As such, there may be at all times hope for extra recoveries within the months to return. Furthermore, the sale of the FTX subsidiaries and regional arms could also rake in a considerable amount of funds. Nevertheless, it’s unclear just how much money the sales will usher in. The one thing certain is that FTX debtors have a multiyear court proceeding before they see any funds being returned. Until then, all we are able to do is wait and watch.
(Edited by : Anushka Sharma)