FTX has discovered $5 billion in cash and liquid crypto currencies and is considering a sale.
Two months after the financially challenged crypto currency exchange filed for bankruptcy protection, the newly installed leadership of FTX has stated (1) that it has discovered $5 billion in cash, liquid bitcoin, and liquid investment instruments.
During the bankruptcy court hearing in Delaware on Wednesday morning, FTX attorney Andy Dietderich stated that the company had discovered the assets. According to Dietderich, the $5 billion figure does not consider the $425 million worth of crypto currencies now being held in safekeeping by the Securities Commission of the Bahamas.
The attorney did not explain whether this included over $450 million worth of Robinhood stock that belonged to Sam Bankman-Fried, which the United States government claimed last week as the former CEO of FTX waits to be tried on allegations of fraud.
“At this time, we are engaged in the laborious process of recreating petition date claim data for each individual consumer. We are building financial statements from the ground up using the general ledger and bank transaction records rather than relying on the previous incomplete and unreliable financial statements provided by the debtors,” Dietderich added.
“Because of this, for the very first time, we will be able to provide an exact description of the financial performance of the creditors.”
During a lengthy session, attorneys appeared in front of Judge John Dorsey to discuss the potential sale of FTX businesses and the question of whether or not to redact the identities of the company’s nine million clients.
FTX to Sell its Core Exchange?
Per Kevin Cofsky, a partner at FTX’s proposed investment bank Perella Weinberg Partners, the FTX could sell its main exchange while the company is going through bankruptcy.
Cofsky stated that
“we have already initiated a review of a reorganization of the core exchange, and that process is ongoing. We have already initiated a review of a reorganization of the core exchange. FTX has made the sale of four entities its top priority since, according to the company, these firms are relatively independent from the crypto juggernaut and may see a value reduction if they are sold at a later date. LedgerX, Embed, FTX Japan, and FTX Europe are the names of these respective companies.
Cofsky further argued that disclosing the names of FTX consumers could hurt the company’s value because other cryptocurrency companies could approach those customers. Attorney Juliet Sarkessian, representing the U.S. trustee in charge of managing the bankruptcy, disputed with the assertion that poaching is the primary reason customers would quit FTX.
“I think they may be leaving the platform for reasons other than poaching,” said Sarkessian, noting that former executives of FTX are accused of commingling customer funds with those of its sibling crypto trading firm, Alameda Research.
The attorney representing FTX, Brian Glueckstein, requested that the judge conceal the identities and addresses of FTX customers for six months. He referred to the recent bankruptcy case of the failed cryptocurrency lender Celsius, in which the customers’ names were disclosed.
According to Glueckstein,
“that decision is an outlier and certainly should not be adopted here in its entirety.”
Later today, it is anticipated that legal representatives for the United States trustee, as well as members of the media, would argue in favor of making the names of the customers public.
