New FTX Management Has Located Over $5B in Liquid Assets

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Key Takeaways

  • The new FTX management has located over $5 billion in liquid assets.
  • These include cash, liquid cryptocurrencies, and liquid investment securities.
  • The sum does not include the $425 million being held by the Securities Commission in the Bahamas, nor the $490 million recently seized by the Department of Justice from one of Sam Bankman-Fried’s holding companies.

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Under John Ray, FTX has located over $5 billion of company-related liquid assets—including cash, liquid cryptocurrencies, and liquid stocks.

Locating the Funds

The new management team at FTX has been hard at work.

A lawyer representing the defunct crypto exchange, Adam Landis, declared during a hearing today that FTX had recovered over $5 billion in various assets.

“We have located over $5 billion of cash, liquid cryptocurrency and liquid investment securities measured at petition date value,” stated Landis, who works as an attorney at Sullivan & Cromwell. “[It] just does not ascribe any value to holdings of dozens of illiquid cryptocurrency tokens, where our holdings are so large relative to the total supply that our positions cannot be sold without substantially affecting the market for the token.”

In other words, the $5 billion figure most likely excludes Alameda Research’s positions in tokens such as SRM, FIDA, MAPS, and OXY. The trading firm had previously given these holdings high valuations in its balance sheet despite its inability to offload the tokens without causing their respective markets to crash.

Besides the $5 billion in liquid assets recovered by FTX, $425 million is currently being held by the Securities Commission of the Bahamas, and over $490 million was seized by the Department of Justice on Monday from one of Sam Bankman-Fried’s holding companies. The DOJ is also investigating the identity of the FTX hacker, who stole at least $372 million from the platform on November 12 as it was collapsing.

It is still unclear how much FTX actually owes its creditors. The company indicated in its initial bankruptcy filings that the hole in its balance sheet was anywhere $1 billion and $10 billion.

Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other crypto assets.

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