Bankrupt Crypto Giant FTX Recovers $5 Billion of Assets

Sam Bankman-Fried, CEO and founder of the now bankrupt crypto exchange, FTX. Credit: Cointelegraph / Wikimedia Commons CC BY 3.0

FTX Trading Ltd., the giant crypto exchange company forced to file for bankruptcy in November last year, has reportedly located more than $5 billion worth of assets.

FTX has been in hot water since November 2022 when a mass exodus of its users took place. Thousands of customers attempted to withdraw their assets when rumors emerged that the company’s finances were on shaky ground. However, FTX was unable to meet the customer demand for withdrawals.

Since then, the company has declared bankruptcy, and its founder and CEO, Sam Bankman-Fried was arrested for fraud-related offenses. The collapse of FTX has been yet another blow to the crypto industry, which has been plagued with uncertainty in recent years.

FTX locates $5 billion

“We have located over 5 billion dollars of cash, liquid cryptocurrency and liquid investment securities,” said Andy Dietderich, an attorney for FTX. US Judge John Dorsey is presiding over the case in a bankruptcy court in Delaware.

Dietderich added that the recovered assets do not include those seized by the Securities Commission of the Bahamas. FTX was based in the Bahamas when Bankman-Fried was arrested in December last year.

Federal prosecutors recently announced that they are planning to seize at least $500 million worth of assets connected to FTX as they continue to prosecute the fallen crypto empire.

For FTX customers who were unable to withdraw their assets, the recent recovery of $5 billion will provide some hope that they will be compensated.

John J. Ray, who replaced Bankman-Fried as CEO of the company and was brought in as a liquidator in November, said recently that at least  $8 billion of customer assets were unaccounted for in what he described as the “worst” case of corporate mismanagement he had ever seen.

The rise and fall of a crypto empire

At its height, FTX was the third-largest cryptocurrency exchange by volume. Bankman-Fired, who founded the company, was nicknamed “the King of Crypto”.

However, the company was forced into bankruptcy when it emerged that an $8 billion hole existed in its accounts. A court filing issued in November revealed that FTX owed its 50 largest creditors almost $3.1bn.

For the 30-year-old founder of the company, FTX’s downfall also amounted to a dramatic shift in his personal fortune. As recently as late October last year, Bankman-Fried had a net worth estimated at more than $15bn. However, the young entrepreneur now faces personal and financial ruin.

Bankman-Fried was soon being investigated by the Department of Justice and the Securities and Exchange Commission. On December 12, 2022, and later extradited to the US.

The FTX founder faces a wide array of charges including wire fraud, commodities fraud, securities fraud, money laundering, and campaign finance law violations. He could be sentenced to a maximum of 115 years in prison.

Bankman-Fried pleaded not guilty to all charges and is currently free on a $250 million bond, the largest in the history of American criminal proceedings.