The new FTX management has located $1B in assets, including $720M cash
Poor record keeping is making the unwinding of the collapse FTX exchange difficult.
The new FTX management is trying to trace millions of dollars from several bank accounts.
So far, the new management has identified over $1 billion.
FTX’s new management, which took over from the founder Sam Bankman-Fried, on Tuesday told a procedural hearing that it has identified assets worth more than $1 billion since it started a strategic review of its assets. It also said that it had located about $720 million held by US financial institutions, which it is yet to consolidate.
The US financial institutions were authorized to hold funds by the US Department of Justice and about $500 million are already confirmed held in US institutions.
The new FTX chief financial officer (CFO), Mary Cilia speaking under oath during the bankruptcy hearings said:
“We are reaching out to all of those banks and changing the signatories on the accounts so that we can get access to the accounts and move the cash as much as we can to authorized depository institutions.”
$423 million held at a single broker
The CFO also mentioned that about $423 million held by US authorities are from a single broker though she never mentioned the broker by name. Cilia said, “$485 million are already in an authorized deposit institution”
Besides the funds held in the US, there is about $130 million in cash that is locked up in Japan where local authorities have ring-fenced the funds for local customers.
Steve Coverick, a senior director at FTX’s financial advisors Alvarez & Marsal told the hearing that the new management is working to identify FTX’s international crypto assets and transfer them to cold wallets using custodial providers like Bitgo, which FTX hired in November.
Difficulties in winding up FTX
While the Chapter 11 bankruptcy hearings are supposed to wind up the FTX exchange, there have been complications due to poor record keeping and weak governance under the former CEO, SBF. The new management is being forced to look for details by reviewing customer terms and conditions stored in a variety of places including Slack and Google Drive.
As a result, the exchange is yet to file a statement of its financial position or of its assets as required under the US bankruptcy law. It however estimates it could do so in April next year.
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