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Lawyer Recovered

FTX Lawyer: FTX Has Recovered $5 Billion in Cash & Crypto

Adam Landis, FTX’s lead attorney, asserted that the exchange reclaimed over $5 billion worth of assets in cash and crypto.

The announcement came amid the FTX bankruptcy hearing on Jan. 11. The figure surpassed previous estimates and it doesn’t present low-liquid assets.

Massive Losses for All

FTX’s lawyer said that the restructuring team initially identified $5 billion assets including cash, cryptocurrency, and liquid securities at the time of hearing.

“[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,” Landis noted.

The exchange verified the announcement, noting that the latest estimate excludes $426 million. This sum is currently managed by the Bahamas.

Previously, FTX stated that it had only recovered $1 billion. In less than a month, the figure has multiplied five times. It is anticipated that FTX leaves approximately 8-10 billion USD in the process of employing customer deposit monies to invest with Alameda.

Although the asset details retrieved from losses remain unknown, the announcement has brought investors and creditors fresh hope, who previously had to brace themselves for just receiving around one-tenth of the money locked on the floor.

Following a series of exposures, the erstwhile leading bitcoin exchange filed for bankruptcy protection in November. It was projected that FTX held $9 billion in assets at the time of filing. The bulk, however, is said to be illiquid.

A new claim against Sam Bankman-Fried and Gary Wang is now making headlines in Delaware.

Ongoing Litigation

The legal team accused FTX’s former CEO of conspiring with the former CTO to withdraw money from users behind closed doors. Furthermore, the $65 billion in cash raised by Alameda Research from FTX was spent on real estate and office constructions, among other personal expenses.

In addition, the judge gave permission for FTX to continue protecting the confidentiality of the personal information of the exchange’s more than 9 million creditors for another three months.

Before it, a number of the most prominent Western news outlets had submitted a petition to the court requesting that it declassify information regarding creditors.

According to recent developments in the case, Nishad Singh, FTX’s former Director of Engineering, pleaded guilty earlier this week.

Singh is the latest figure to join investigators in return for limited immunity, following FTX co-founder Gary Wang and former Alameda Research CEO Caroline Ellison. Ellison admitted in a guilty hearing to concealing billions of dollars given away by Alameda to FTX executives.

FTX After Effects Will Continue

It’s clear that we’re not going to get to the end of FTX’s demise. Meanwhile, the exchange’s demise, unfortunately, does not benefit its larger competitors. Both Coinbase and Binance have had significant regulatory and financial issues.

Prosecutors in the United States have initiated an investigation into the relationship between Binance and its hedge funds. Binance has long been a focus of regulators, and has received increased attention in the aftermath of FTX’s demise.

Coinbase is trying to stay afloat in the face of a market downturn and harsh macroeconomic conditions. The newest layoffs at America’s largest cryptocurrency exchange were revealed on January 10, bringing down the price of COINs.

After examining the prospects for 2023, Coinbase CEO Brian Armstrong admitted that the exchange needs to minimize costs to increase its sustainability in all scenarios. He further said that there is no other option except to cut off the workforce.

Job losses in the tech sector and cryptocurrency arose in 2022 and have since shown no signs of easing.

Given the crypto market’s extended recession, the collapse of prominent industry figures, and the bleak global outlook, it seems that more rounds of layoffs are imminent.

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