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A representative for now-tumbling crypto exchange FTX said the company had found about $5 billion in new assets consisting of crypto, cash, and liquid investment securities.
FTX Has Found About $5 Billion in Assets
The company will use this money to pay off the many debts it now owes and to relieve the needs of its creditors. The asset notice was released to the public by the exchange’s chief attorney Adam Landis.
Last December, FTX executives claimed to have tracked as much as $1 billion in assets. This new money is much more, though unlikely to change the game of the trading platform, which is currently going through bankruptcy proceedings. In a statement, Landis said:
We are building financial reports from the ground up using ledgers and bank transaction records rather than previous debtors’ financial reports which were incomplete and unreliable. This will put us in a position to accurately describe the debtor’s financial results for the first time. We are also pursuing plans to monetize more than 300 other non-strategic investments, with a book value of over $4.6 billion.
The drama surrounding FTX continues to build as the company’s former chief executive – Sam Bankman-Fried – has been arrested and is now awaiting trial at his parents’ home in Northern California. Extradited from the Bahamas, it is alleged that SBF and fellow FTX executives took part in fraudulent activities that included using customer funds to repay loans taken out by fellow SBF company Alameda Research.
In addition, it was reported that they used client money to purchase real estate in the Bahamas, the state where FTX is headquartered. At the time of writing, the country’s securities regulator held about $425 million that the exchange once owned.
Despite finding a large amount of money, the company is still in a very dark place which is unlikely to disappear anytime soon. It is estimated that FTX owes money to as many as 50 separate creditors, with the largest owing more than $3 billion. As such, the funds found will likely only be sufficient to repay about two or three of these creditors.
This May Not Help Much
Unless FTX can somehow access hundreds of billions to trillions, companies are unlikely to emerge from the other end of the tunnel unscathed.
The exchange problems started in November last year when SBF announced on social media that its company was experiencing liquidity difficulties and needed cash quickly. Initially, he turned to Binance for help, hoping a bigger company would buy it, but the company saw the problems FTX allegedly faced and said “no” without hesitation. SBF’s bankruptcy and resignation soon followed.
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