FTX has so far recovered more than $5 billion in cash, easy-to-sell digital assets and other liquid assets, a lawyer for the fallen crypto exchange said Wednesday in a Delaware bankruptcy court, a much smaller amount than what it owes to its creditors, as lawyers and regulators try to pick up the pieces of Sam Bankman Fried's once-great crypto empire.
FTX is also in the process of liquidating another $4.6 billion of lesser convertible assets to "book value," company lawyer Andrew Dietderich said Wednesday, according to several outlets, although it is unclear how much of that book value FTX will be able to recover upon selling the assets.
FTX, which owes $3.1 billion to its 50 largest creditors and at least $5 billion more to its nine million customers and smaller creditors, filed for bankruptcy Nov. 11 between FTX and Bankman-Fried's hedge fund Alameda Research.
It is not yet entirely clear how large the fund to settle for FTX creditors will be, Dietderich said, pointing to the still significant shortfall in value between the company's assets and its liabilities.
The background
The stunning collapse of FTX late last year brought Bankman-Fried eight federal criminal charges related to alleged fraud at FTX and Alameda, which is accused of secretly using money from FTX customers for its operations. Bankman-Fried, whose net worth peaked at about $26.5 billion, according to Forbes calculations, pleaded not guilty to the charges last week. His trial begins on Oct. 2, said the judge presiding over the arraignment. Bankman-Fried could face up to 115 years in prison if found guilty on all charges. Bankman-Fried's former top associates the ex-CEO of Alameda and Bankman-Fried's ex-girlfriend Caroline Ellison and FTX founder Gary Wang each pleaded guilty to related charges last month, and Ellison testified that she and Bankman-Fried knowingly defrauded investors.
Crucial ruling
"We know what Alameda did with the money. There were planes and houses bought , parties thrown and political donations made," Dietderich said Wednesday, referring to Bankman-Fried's $40 million penthouse in the Bahamas and tens of millions in campaign contributions, which prosecutors say were illegally funded with money from FTX clients.
In Delaware bankruptcy court Tuesday, the star-studded list of investors in FTX was unveiled, likely to see their investments in the company, once valued at $32 billion, fall to zero. Billionaires Peter Thiel, Daniel Loeb, Robert Kraft and Paul Tudor Jones, Shark Tank' Kevin O'Leary and NFL star Tom Brady and his ex-wife Gisele Bündchen are among those included in the document.
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