FTX’s new management, which took over from former CEO and founder Sam Bankman-Fried on Tuesday revealed at a procedural hearing that it has identified assets worth over $1 billion since starting a strategic review of the firm’s assets.
FTX’s newly appointed management which took over from former CEO and founder SBF revealed at a procedural hearing on Tuesday that it had over $1 billion in assets identified. According to a report by CoinDesk, management located about $720 million in cash assets, which the exchange is yet to consolidate, in U.S. financial institutions authorized to hold funds by the Department of Justice. They added that an additional about $500 million is already being held in U.S. institutions.
Speaking under oath during part of bankruptcy proceedings, Mary Cilia, FTX’s new chief financial officer 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.
Cilia added that about $130 million of cash is locked up in Japan where local regulations have allocated funds for local customers. A reported $6 million is also being kept to cover operational expenses including payroll. The CFO also added that most of the remaining $423 million held by unauthorised U.S. institutions are being held by a single broker but neglected to mention the identity of this broker.
Efforts to Locate Funds Remain Ongoing
Steve Coverick, a senior director at FTX’s financial advisors Alverez & Marsal said at the hearing that there are “ongoing efforts” to identify FTX’s international crypto assets and then transfer them to cold wallets using custodial providers such as Bitgo which FTX appointed in November.
Difficulties in Winding Up FTX
When FTX filed for Chapter 11 bankruptcy proceedings, the hearings were supposed to wind up the FTX but difficulties have arisen due to weak governance and poor record keeping by former CEO and founder SBF. These difficulties are adding to FTX’s new management’s already mammoth task as they are being forced to look for details by reviewing customer terms and conditions which have been stored in a variety of places such as Google Drive and Slack. FTX has yet to file a statement of assets or of its position required under U.S. bankruptcy law, and Cilia indicated that the firm currently estimates only being able to do so in April.
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