Crypto exchange FTX has recovered more than $5 billion, but the extent of customer losses in its collapse is still unknown.
The collapse of the company has left many investors and customers wondering about the extent of their losses, and the situation has only grown murkier as the company’s founder, Sam Bankman-Fried, has been accused of orchestrating an “epic” fraud that may have cost investors, customers, and lenders billions of dollars.
According to an attorney for the bankrupt company, FTX has been able to recover more than $5 billion of cash, liquid cryptocurrency, and liquid investment securities. However, this is not enough to cover the potential customer losses, which are still unknown. The U.S. Commodities Futures Trading Commission has estimated that the missing customer funds are more than $8 billion.
In an effort to recoup some of the lost funds, FTX plans to sell off non-strategic investments that are valued at around $4.6 billion. However, the work to obtain accurate internal records is still ongoing, and a full account of the funds that might be used to repay creditors is not known.
The recovered funds also do not include assets seized by the Securities Commission of the Bahamas, where Bankman-Fried was located. The attorney estimated the seized assets were worth around $170 million while Bahamian authorities put the figure as high as $3.5 billion.
These seized assets are largely composed of FTX’s proprietary and illiquid FTT token, which is likely to head towards zero in value, further complicating the situation.
In a report by The Globe and Mail, it was stated that FTX’s legal team was in court on Wednesday to seek approval for procedures to sell affiliates LedgerX, Embed, FTX Japan, and FTX Europe. It said, however, that the U.S. Trustee is not in favour of selling the affiliates before the whole extent of the alleged FTX fraud has come to light.
The collapse of FTX will have impacted heavily on celebrities who were working with the platform, including American football star Tom Brady, Brady’s former wife, supermodel Gisele Bündchen, and New England Patriots owner Robert Kraft.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.