FTX debtors identify $5.5 billion of liquid assets in ’Herculean effort’

Quick Take

  • FTX has identified $5.5 billion in liquid assets, part of what CEO John Ray called a “Herculean effort” to untangle the firm’s finances.
  • FTX.com and FTX US each face digital asset “shortfalls,” the FTX debtors said in a statement.

Beleaguered crypto exchange FTX identified $5.5 billion in liquid assets in what CEO John Ray called a “Herculean effort” to assess the firm’s financial situation.

FTX debtors have identified $1.7 billion of cash, $3.5 billion of crypto assets and $3 million of securities, the firm said in a statement. FTX filed for bankruptcy protection in November and could owe $3.1 billion to its top 50 creditors. 

"We are making important progress in our efforts to maximize recoveries, and it has taken a Herculean investigative effort from our team to uncover this preliminary information,” Ray said in a statement."We ask our stakeholders to understand that this information is still preliminary and subject to change.” 

FTX’s top-level management and advisers met with the committee of unsecured creditors in the bankruptcy case on Tuesday to share a presentation on the asset recovery process. The $5.5 billion in assets is slightly higher than the $5 billion that FTX lawyers told a bankruptcy judge they had located last week.

The debtors also discovered that both FTX.com and FTX US face digital asset shortfalls. Debtors have identified $1.6 billion of digital assets associated with FTX.com. Of that total, $323 million was subject to unauthorized third-party transfers after the bankruptcy filing, and another $426 million of that sum is in the custody of Bahamas regulators.

Meanwhile, $742 million is in cold storage under FTX debtor control and $121 million is pending transfer to cold storage under the debtors’ control.

THE SCOOP

Keep up with the latest news, trends, charts and views on crypto and DeFi with a new biweekly newsletter from The Block's Frank Chaparro

By signing-up you agree to our Terms of Service and Privacy Policy
By signing-up you agree to our Terms of Service and Privacy Policy

“The assets identified as of the Petition Date are substantially less than the aggregate third-party customer balances suggested by the electronic ledger for FTX.com,” the company said.

The debtors identified $181 million of digital assets associated with FTX US, $90 million of which was subject to unauthorized third-party transfers after the bankruptcy filing. Of the rest, $88 million is in cold storage under FTX debtor control and $3 million is pending transfer to debtor control.

Former FTX CEO Sam Bankman-Fried, who is facing criminal fraud charges, has insisted that FTX US is “fully solvent” and can pay back its customers. 

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.


© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Stephanie is a senior reporter covering policy and regulation. She is focused on legislation, regulatory agencies, lobbying and money in politics. Stephanie is based in Washington, D.C.

Editor

To contact the editors of this story:
Christiana Loureiro at
[email protected]
Michael McSweeney at
[email protected]