FTX’s bankruptcy estate has made significant progress in tracing down billions of dollars in funds lost following the calamitous collapse of Sam Bankman-Fried’s cryptocurrency exchange.
“There’s an overwhelming number of ongoing workstreams and ongoing issues in every discipline… Today the situation has been stabilised and the dumpster fire is out, FTX attorney at Sullivan & Cromwell Andy Dietderich told the Delaware Bankruptcy Court on Wednesday.
“Our estate consists of many investments, businesses and causes of action that have not yet been monetised. We are tracking distributable assets, cash, category-A cryptocurrencies and securities.
Lawyers provided a chart valuing these assets at a petition-date value of US$6.2bn (£5bn) including receivables from the settlements and transactions recently approved by the court.
This is a US$800mln increase from the last update in January. However, when taking into account current asset pricing, the value of recovered funds increases to US$7.3bn.
Bitoin’s 80% year-to-date rally has offered a strong boost to the value of FTX’s crypto holdings, though Dietderich warned that “What goes up can go down”.
“We will be increasing distributable assets as the case progresses but it’s also important for us not to lose what we have now,” said Dietderich.
SBF ‘persuasively lied to stakeholders’
In yesterday’s court hearing, Dietderich reiterated in clear terms the many failings inside FTX that led to the once second-largest crypto exchange’s collapse.
“Mr Bankman Fried repeatedly, pervasively, and often persuasively lied to stakeholders, and the customer and creditors in order to maintain a digital con game,” he said.
“The app worked beautifully, but in truth it was a facade, a digital Potemkin Village, or perhaps more apt, a video game.”
A Potemkin Village refers to the fake settlements erected by Russian minister Grigori Aleksandrovich Potemkin to fool Empress Catherine II during her visit to Crimea in 1787.
The term is used as an idiom to describe a false construct devised to improve appearances, in this instance the glossary FTX trading platform hiding layers of mismanagement and possibly massive-scale criminal fraud.
Dietderich also hinted at the possibility of relaunching FTX, though he did not go into greater detail.