FTX: Crypto exchange’s bankruptcy team recovers over £4bn in boost for burnt customers
Collapsed crypto exchange FTX has recovered more than £4.1bn ($5bn) in assets, its bankruptcy team said yesterday, as the firm scrambles for cash to cover the billions of dollars lost by customers and investors.
FTX, founded by disgraced former billionaire Sam Bankman-Fried, was valued at $32bn just over a year ago but imploded in early November.
Federal prosecutors in the US have since accused Bankman-Fried of orchestrating an “epic” fraud that has left customers and investors billions of dollars out of pocket. ‘SBF’ and executives at FTX and its sister trading firm Alameda have been accused of funnelling customer cash to cover their losses after speculative bets on the market went sour.
John Ray, who oversaw the winding up of Enron, has since been parachuted in in a bid to recover assets.
In a hearing in Delaware yesterday, Andy Dietderich, an attorney for FTX, told US bankruptcy Judge John Dorsey in Delaware: “We have located over $5bn of cash, liquid cryptocurrency and liquid investment securities.”
Dietderich also said the company plans to sell nonstrategic investments that had a book value of $4.6bn, Reuters reported.
A slew of UK investors have now reportedly filed complaints with the police after being burnt by the collapse of the exchange.
The downfall of the firm, previously regarded as one of the more stable names in the sector, has prompted a wave of calls for accelerated crypto regulation in the UK.
Ministers are set to bring the sector within the remit of the UK’s financial watchdogs after changes to the Financial Services and Markets Bill currently making its way through parliament. The Financial Conduct Authority currently only regulates crypto firms under anti-money laundering rules.
However, City minister Andrew Griffith said this week that rules for the sector were unlikely to be drawn up this year.