FTX Recovered $5 Billion to Payback Creditors Estimated at $8 Billion

Washington Post | Tory Newmyer | Jan 11, 2023

Image: Unsplash/Jonathan Borba

Collapsed cryptocurrency exchange FTX says it has recovered more than $5 billion worth of cash and crypto assets it may be able to sell to help repay customers and investors, an attorney for the company told a Delaware bankruptcy court on Wednesday.

• Collapsed exchange has found more than 9 million accounts; unclear how many will be made whole
  • Federal regulators have estimated that FTX customer losses exceed $8 billion. John J. Ray III, the corporate wind-down expert now leading the company, told lawmakers last month the company will not be able to recover all of its losses and expects the process to take “months, not weeks.”
  • The company is also trying to sell off other “nonstrategic investments” made by FTX that have a book value of $4.6 billion, he said.
  • Miami-Dade County officially terminated a 19-year, $135 million sponsorship deal with FTX that gave the company naming rights to the arena where the Miami Heat play basketball.

See:  FT Partners Jan 2023 Blockchain and Crypto Market Update Report

• Different authorities are already competing to lay claim to FTX’s holdings.
  • The Justice Department last week told the bankruptcy court that the federal government had seized nearly $500 million worth of shares in online stock trading company Robinhood tied to Bankman-Fried.
  • And authorities in the Bahamas, where FTX was based, have seized a stash of the company’s crypto. It includes a large amount of FTT, the highly volatile digital token issued by FTX, and is worth about $170 million

Mark Pfeiffer, a bankruptcy attorney with Buchanan Ingersoll & Roone:

The results so far seem to be phenomenal.  Typically unsecured creditors can expect about 5 cents on the dollar. Here it looks like it will be much greater. It’s amazing that they’ve gotten their arms around this so quickly

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