The team in charge of the ongoing FTX bankruptcy acknowledged on Thursday that it is still responsible for about $9 billion in customer funds.
As seen in a document on the crypto giant’s website, the team stated that it is unable to find in the jumble of financial records left over from the exchange’s demise.
In a presentation titled “Preliminary Analysis of Shortfalls at FTX.com,” the company claimed that it had finally inventoried every wallet connected to FTX.com. However, it claimed that there was a “massive shortfall” because it could only locate assets belonging to customers worth just under $2.2 billion, of which only $694 million were actual liquid currencies.
That leaves almost $9 billion still lost to the schemes of FTX’s previous executives as compared to the $11.2 billion in outstanding monies that were tied to client accounts.
According to the presentation, a significant portion of this was caused by the alleged conspiracy by former FTX CEO Sam Bankman-Fried to transfer customer cash to his hedge company, Alameda Research.
FTX.com wallets and accounts were used by Alameda to borrow a net $9.3 billion, although it is still unclear how much of the gap is attributable to lost consumer cash.
Alameda allegedly had more than $8 billion in FTX customer funds locked up in its own accounts, according to an earlier accusation made by the Securities and Exchange Commission.
These figures are based on the price of cryptocurrencies at the time the firm filed for bankruptcy back in November, but this is also the first time the bankrupt exchange has publicly acknowledged the exact amount of unpaid payments it is currently managing.
Only $880 million of the $2.2 billion that the corporation was able to recover consists of “liquid assets,” which are linked to dollars, stablecoins, or other significant cryptocurrencies.
The FTT token is one of the $1.5 billion in other “illiquid” assets. In the end, the corporation still owes billions of dollars in several different tokens, like bitcoin and ethereum, as well as smaller sums in coins like FTX’s native token, FTT.
A law firm representing FTX revealed in court records that it had discovered $5.5 billion in assets in customer accounts and other areas of the business, including both cryptocurrency and cash, back in January.
It is still unknown how much of the identified money has been accounted for in this most recent presentation, despite the lawyers’ contention that those digital currencies should be easily converted into cash assets.
The exchange’s Chapter 11 bankruptcy trustee, John J. Ray III, stated in a release that although the information is still preliminary, FTX’s books are “in many cases, totally absent.” Ray has been extremely candid about how crazy things were at FTX soon before its collapse.
He characterized the business as “a complete failure” of corporate governance.
Federal prosecutors initially brought eight counts of fraud and conspiracy against Bankman-Fried, but they subsequently increased that to twelve with new allegations of making hundreds of unlawful political contributions. The disgraced founder of FTX entered a not-guilty plea.
He will go on trial on October 2.