Attorneys for FTX testified during a bankruptcy hearing in Delaware on Wednesday that the company had recovered over $5 billion in liquid assets, such as cash and digital assets.
Along with their ongoing prosecution of FTX co-founder Sam Bankman-Fried, federal prosecutors have announced their intention to seize at least $500 million in assets related to FTX.
Customers of FTX, who lost everything when the cryptocurrency exchange collapsed in November, will welcome the recovery with open arms. Before becoming CEO of FTX, John J. Ray testified that the company had the “worst” case of corporate control he had ever seen, with at least $8 billion in customer assets missing.
Adam Landis, an attorney for FTX, told the court that the $5 billion figure does not include any illiquid cryptocurrency assets. He claimed that the size of the company’s holdings would have a major impact on the market and reduce the value of the stock.
The inability to accurately market illiquid assets contributed to FTX’s demise. Bankman-Fried and Caroline Ellison, the CEO of Alameda Research, were among the FTX executives who took out loans backed by the company’s token FTT. Like the float of a publicly traded company, Alameda controlled the vast majority of FTT coins in circulation and could not have sold their position at full book value.
