Sam Bankman-Fried: Bankrupt Crypto Giant FTX Recovers Over  Billion in Assets

Sam Bankman-Fried: Bankrupt Crypto Giant FTX Recovers Over $5 Billion in Assets

  • Author, Monica Miller
  • Role, BBC News

Photo credit, Getty Images

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Former FTX CEO Sam Bankman-Fried.

The collapsed FTX cryptocurrency exchange has located more than $5 billion in assets, according to a lawyer for the firm.

However, a US bankruptcy court was told on Wednesday that the extent of the losses suffered by customers is not yet known.

Prosecutors have accused former FTX chief executive Sam Bankman-Fried of orchestrating an “epic” fraud that may have cost investors, customers and lenders billions of dollars.

Mr. Bankman-Fried has pleaded not guilty to charges of misleading investors.

“We have located over $5 billion in cash, liquid cryptocurrencies and liquid investment securities,” Andy Dietderich, an FTX attorney, told U.S. Bankruptcy Judge John Dorsey in Delaware.

Mr. Dietderich clarified that the funds recovered do not include assets seized by the Bahamas Securities Commission, where FTX was based and where Mr. Bankman-Fried was living at the time of his arrest.

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Sam Bankman-Fried denies allegations that he knew FTX client money was being used for risky financial bets.

Most FTX clients and investors who suffer losses were not named in the hearings.

However, American football star Tom Brady, his former wife Giselle Bündchen and New England Patriots owner Robert Kraft were mentioned in court filings.

In December, the 30-year-old was arrested in the Bahamas and extradited to the United States. He was accused of committing “one of the greatest financial frauds in the history of the United States”.

FTX, which was valued at $32 billion (19 trillion 501 billion 449 million FCFA) a year ago, filed for bankruptcy protection on November 11. It is estimated that 8 billion dollars (4 trillion 875 billion 837 million 500 thousand FCFA) of customer funds have disappeared.

U.S. federal prosecutors have charged Mr. Bankman-Fried with misappropriating funds from FTX clients to pay debts to his cryptocurrency trading firm Alameda Research and to make other investments.

In December, prosecutors announced eight charges, including wire fraud, money laundering and violation of campaign finance rules. Financial regulators have also filed a complaint against Mr. Bankman-Fried.

FTX co-founder Gary Wang and Caroline Ellison, the former head of Alameda, have also been charged for their alleged role in the company’s bankruptcy. Authorities said they were both cooperating with the investigation.

At the end of December, Mr. Bankman-Fried was released on bail of 250 million dollars (152 billion 397 million 320 thousand FCFA), on condition that he does not leave his parents’ house in California.

In an interview with BBC News before his arrest, he explained: “I didn’t knowingly commit fraud. I don’t think I committed fraud. I didn’t want any of this to happen. I certainly wasn’t not as competent as I thought.”