FTX officials overseeing its bankruptcy have recovered more than $5 billion in cash and other liquid assets that may be used to help repay creditors, a lawyer for the failed crypto firm said during a bankruptcy court hearing Wednesday.
That disclosure significantly raises the estimated amount of funds FTX claims to hold. Last month, FTX lawyers submitted filings that showed the company and its affiliates had a total of $1.2 billion in cash.
The lawyers also said they had identified more than 9 million creditors — far more than earlier estimates of around 1 million.
It remains unclear how much creditors will get back of the funds that were frozen after trading was halted as FTX began to unravel in November. The firm filed for bankruptcy on November 11 in the midst of a devastating liquidity crunch.
Since then, FTX’s co-founder Sam Bankman-Fried has been charged with orchestrating what prosecutors call one of the “biggest financial frauds in American history.”
He pleaded not guilty last week to eight counts of fraud and conspiracy in federal court in New York. Prosecutors say Bankman-Fried deceived customers and investors in FTX, stealing billions’ worth of deposits to cover losses at his hedge fund, Alameda Research, while lying to investors about FTX’s operations.
FTX’s implosion is expected to wipe out its equity investors, dozens of whom were identified in court filings this week. They include celebrities such as NFL star Tom Brady and supermodel Gisele Bundchen.
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