FTX has recovered over $5 billion in liquid assets, including cash and digital assets, according to attorneys representing FTX in Delaware bankruptcy court. The news comes after federal prosecutors announced plans to seize at least $500 million worth of FTX-connected assets as part of their ongoing prosecution of FTX co-founder Sam Bankman-Fried. It will be a welcome boon to FTX customers following the collapse of the crypto exchange in November. FTX’s new CEO, John J. Ray, previously attested that at least $8 billion of customer assets were unaccounted for in the “worst” case of corporate control he’d ever seen.
The $5 billion figure does not include any illiquid cryptocurrency assets, according to FTX attorney Adam Landis. He said the company’s holdings are so large that selling them would substantially affect the market, driving down their value. FTX’s collapse was attributed, among other things, to a failure to mark illiquid assets to market correctly. FTX executives, including Bankman-Fried and Alameda Research CEO Caroline Ellison, borrowed against the value of the FTX-issued token FTT. Alameda controlled the vast majority of FTT coins circulating, similar to a publicly traded companies float, and could not have liquidated their position at full book value.
