John Ray, chief executive officer of FTX Cryptocurrency Derivatives Exchange, arrives in bankruptcy court in Wilmington, Delaware, USA on Tuesday, November 22, 2022.
Eric Lee | Bloomberg | Getty Images
ftx has recovered more than $5 billion in liquid assets, including cash and digital assets, Delaware bankruptcy court attorneys said at an FTX bankruptcy hearing Wednesday.
The news comes after federal prosecutors announced plans to seize at least $500 million in FTX-related assets as part of their ongoing prosecution of FTX co-founder Sam Bankman-Fried.
The recovery will be a welcome boon to FTX customers after the crypto exchange imploded in November. FTX’s new CEO, John J. Ray, has previously stated that at least $8 billion in client assets went unaccounted for in the “worst” case of corporate scrutiny he had ever seen.
The $5 billion figure does not include illiquid cryptocurrency assets, FTX attorney Adam Landis told the court. He said the company’s holdings are so great that selling them would significantly affect the market, decreasing their value.
FTX’s collapse was related, among other things, to the failure to properly mark illiquid assets at market value. FTX executives, including Bankman-Fried and Alameda Research CEO Caroline Ellison, borrowed against the value of FTX-issued token FTT. Alameda controlled the vast majority of FTT coins in circulation, similar to a publicly traded company, and had been unable to liquidate their position at full book value.
Correction: This article has been updated to reflect that FTX attorney Adam Landis told the court the $5 billion figure does not contain any illiquid cryptocurrency assets.