A bankruptcy lawyer testified during a hearing on Wednesday that cryptocurrency exchange FTX has recovered more over $5 billion in various assets, excluding another $425 million in cryptocurrency held by the Securities Commission of the Bahamas.
“We have located over $5 billion of cash, liquid cryptocurrency and liquid investment securities measured at petition date value. Just does not ascribe any value to holdings of dozens of illiquid cryptocurrency tokens, where our holdings are so large relative to the total supply that our positions cannot be sold without substantially affecting the market for the token,” said FTX’s attorney Adam Landis.
The announcement significantly increases the total FTX claims it owns, after the company’s new leadership stated that it could only discover slightly more than $1 billion on December 20, 2022. It is still unknown how much money FTX owes its creditors in total. The company’s management checked the box suggesting a sum between $1 billion and $10 billion in the original bankruptcy filings.
According to Landis, Sam Bankman-Fried gave Gary Wang the order to design a “backdoor” that would allow Alameda to borrow money from FTX clients without their consent. He claimed that the previous CEO established a $65 billion line of credit from the exchange to the trading division.
Mary Cilia, the chief financial officer, predicted in December that the company might finish that work by April. But during the hearing on Wednesday, Judge John Dorsey of the Delaware Bankruptcy Court set a deadline of March 15. There could be as many as 9 million creditors, according to Brian Glueckstein of Sullivan & Cromwell, reiterating a claim made by Kevin Cofsky, a partner at financial advisory firm Parella Weinberg Partners.
“It does not matter who collects $1 for customers, as long as the customers get it,” Landis said. “We’ve established a task force with the official committee of creditors and the Bahamas JPL to explore alternatives for the sale or reorganization of the international platform.”