FTX customers heaved a bit of relief after it was mentioned during an FTX bankruptcy hearing that lawyers were able to recover over $5 billion in cash and other liquid assets.
It should be noted that the recovered funds do not include the assets already seized by the Securities Commission of the Bahamas where FTX is based and where former chief executive Sam Bankman-Fried was residing.
According to filings made last month, FTX and its affiliates had roughly $1.2 billion in cash. About 9 million creditors have been identified but it has yet to be known how much creditors will be getting back after the company’s funds were frozen after trading was halted as FTX began to unravel in November, CNN reported.
This comes not long after new FTX CEO, John J. Ray, said that at least $8 billion of customer assets were unaccounted for in the “worst” case of corporate control he’d ever seen, CNBC reported.
It was also added by FTX attorney Adam Landis that the $5 billion doesn’t include any illiquid cryptocurrency assets. He added that selling company holdings are so large that it would affect the market and likely drive down their value.
Bankman-Fried has been charged with orchestrating what prosecutors call one of the “biggest financial frauds in American history.”
He pleaded not guilty last week to eight counts of fraud and conspiracy in federal court in New York. Prosecutors claim that Bankman-Fried deceived customers and investors.
Most of the FTX customers who are facing losses have not been named as of this writing. However, the names of NFL star Tom Brady, his former wife Giselle Bündchen and New England Patriots owner Robert Kraft were mentioned in court filings.
"I didn't knowingly commit fraud. I don't think I committed fraud. I didn't want any of this to happen. I was certainly not nearly as competent as I thought I was," Bankman-Fried said before his arrest via BBC.
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