Two months after FTX filed for bankruptcy, lawyers for the cryptocurrency exchange have begun to identify and put a value on its assets, as they determine how much they will be able to recover to repay lenders and customers who lost billions of dollars.
In a court filing, lawyers from the New York firm of Sullivan & Cromwell said that they had located $5.5 billion in assets held in customer accounts or tucked away in other parts of the firm.
In just three years, FTX, founded by Sam Bankman-Fried, had swiftly put money into a hodgepodge of assets, from esoteric cryptocurrencies to investments in several other firms.
About $1.7 billion of the $5.5 billion is in cash on FTX’s books. Another $3.5 billion or so is in cryptocurrency assets — a pool that includes more established coins like Bitcoin, as well as other coins of more questionable value. The lawyers say that stash of digital currencies can be turned into cash because the coins are relatively easy to trade. The total includes $268 million of Bitcoin, as well as $245 million of so-called stablecoins, or cryptocurrencies that are designed to maintain a constant value of $1. But it also includes holdings worth hundreds of millions of dollars of lesser-known coins that may not retain their value over the long term: There’s $529 million of FTT, a coin that FTX created, as well as $42 million of Dogecoin.
The crypto recovered by FTX also includes another $1.2 billion in various digital currencies held at other exchanges — holdings the lawyers said they had “limited visibility” into.
A smaller amount, worth about $300 million, sits in investment funds tied to the cryptocurrency market.
FTX also holds sizable positions in 20 digital assets that the lawyers described as “illiquid tokens” that are difficult to convert into cash.
FTX said in a statement accompanying the filing that they found fewer digital assets than they had hoped to find, both at the main offshore exchange based in the Bahamas and its US unit. The FTX lawyers said they had shared the information earlier in the day with members of a committee that represents customers, lenders and others. As lawyers continue to dig into the finances of FTX, the final accounting of what the exchange owes, what it holds and what can be recovered is likely to change.
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