FTX Discovers $5.5B in Liquid Assets — Debtors Explore Ways to Maximize Recovery through Potential Sale of Subsidiaries, Real Estate

On Jan. 17, 2023, FTX Trading Ltd. and affiliated debtors up to date the general public and detailed that the agency’s present directors have found $5.5 billion of liquid belongings to this point. Top-level executives, together with the brand new FTX CEO and chief restructuring officer, John J. Ray III, met with the chapter case’s committee of unsecured collectors to share the information.

FTX Uncovers $5.5 Billion in Liquid Assets Through ‘Herculean Investigative Effort’

FTX has found $5.5 billion in liquid belongings, based on a press assertion launched at 2:40 p.m. Eastern Time, Tuesday. The debtors, together with FTX CEO John J. Ray III, introduced that the staff recognized the funds by way of a “herculean investigative effort.” The firm’s press launch particulars that the staff discovered $3.5 billion in cryptocurrency belongings, $1.7 billion in money deposits and roughly $3 million in securities.

The press launch additional famous that the FTX staff found $323 million was misplaced to unauthorized third-party transfers earlier than the Chapter 11 chapter submitting was registered on Nov. 11, 2022. Furthermore, $426 million “was transferred to cold storage under the control of the Securities Commission of The Bahamas,” the debtors’ assertion particulars.

FTX debtors disclose that crypto belongings at present held by FTX executives and the restructuring groups are additionally held in chilly storage. “We are making important progress in our efforts to maximize recoveries, and it has taken a Herculean investigative effort from our team to uncover this preliminary information,” Ray defined within the replace. “We ask our stakeholders to understand that this information is still preliminary and subject to change. We will provide additional information as soon as we are able to do so.”

FTX Debtors Investigate Historical Transactions, Including Voyager and Blockfi Deals, and $93M in Political Donations

The presentation shared with the committee of unsecured collectors can be connected to the FTX press launch, and it notes that an investigation “confirmed shortfalls at both international and U.S. exchanges.” Furthermore, the investigation “uncovered the mechanics behind how Alameda Research had the ability to borrow without collateral effectively unlimited amounts from customers.” The debtors’ report insists {that a} “small group of individuals” had the power to take away belongings from FTX with out it ever being “recorded on the exchange ledger.”

In addition to the recovered $5.5 billion, FTX debtors are exploring a number of aspects to maximise the restoration course of by way of the “potential sale” of 4 subsidiaries. The staff is exploring methods to monetize the a whole lot of investments made that at present maintain a ebook worth of round “$4.6 billion.”

FTX debtors need to maximize restoration by “marketing real estate in the Bahamas,” and investigators purpose to probe “all historical transactions” associated to the enterprise.

The actual property owned by the inside circle is value round $205.5 million, stretched throughout 27 totally different properties positioned in The Bahamas. The historic transactions being investigated contain the Voyager and Blockfi offers, alongside $93 million value of political donations FTX executives made between March 2020 and November 2022.

“Hundreds of [mergers and acquisitions] M&A and other transactions under review,” the presentation explains. The presentation additionally offers an in depth visible map of how the inside circle, principally Alameda Research, might “withdraw assets without [a] record on the exchange ledger.”

What are your ideas on FTX’s efforts to maximise restoration and uncover the reality behind the unauthorized transfers and historic transactions? Share your insights within the feedback under.