If customers affected by the debacle of FTX they cling to the hope of recovering their funds, the news coming from the company is not good. The bankruptcy managers exchange of cryptocurrencies reported that about 8,900 million dollars are still lost.
As mentioned The Wall Street JournalIt is the first time that those led by John J. Ray III reveal how much money has disappeared from the coffers of the firm founded by Sam Bankman-Fried. The lawyer leading the bankruptcy process stressed that they continue to work to find and secure the assets that have disappeared from FTX, but the prospects are not good.
At the time of bankruptcy, FTX reported that there were $11.6 billion of outstanding balances in client accounts.. However, they have only been able to trace about $2.7 billion in assets belonging to users of the exchange of cryptocurrencies.
Where is the remaining $8.9 billion? The company estimates that this amount is part of the $9.3 billion that Alameda Research extracted to finance its investments. Recall that the firm led by Caroline Ellison used monstrous sums from FTX clients without their consent, taking advantage of a “back door” in the company’s software.
For now, it is unknown where the money in question went. Investigations have revealed that many of Alameda Research’s investments were in risky assets or positions, and that they ended up resulting in failures. Until last January 31, the company had only $475 million in cash on hand.
Nearly $9 Billion of FTX Clients Still Missing
Thus, the speculations around the almost 9,000 million missing dollars are various. Although there are two that are the ones that seem to have the most strength. On the one hand, that the money would have been “burned” in bad investments. On the other, that it has been used for the enrichment of FTX executives and to finance their luxurious lifestyle.
And we must not forget that the platform also has been the victim of hacks since he filed for bankruptcy. It is estimated that some 500 million dollars have disappeared due to unauthorized transactions, although the company has already managed to recover part of what was stolen.
How feasible it is to recover the funds that have been drained from FTX user accounts is a question that today has no answer. Nor is it known what will happen to the 2.7 billion dollars that have already been recovered. Not only because of the deficit between the money available and what must be returned, but by the real valuation of the available assets.
Of the aforementioned amount, more than half —about 1.5 billion dollars— is made up of cryptocurrencies such as FTT, the native FTX token, whose value plummeted after the bankruptcy of the exchange. While some 880 million dollars correspond to assets such as Bitcoin, Ethereum, stablecoins and fiat money, while around 400 million dollars are accounts receivable.
A pessimistic outlook for the recovery of funds
John J. Ray III assured that the information about the funds recovered is preliminary and that they will continue working to rescue more missing assets. Although the outlook is not encouraging.
In his presentation, the executive indicated that they have already “identified and inventoried” all the cryptocurrency portfolios associated with FTX and its subsidiary FTX.US. So if the lost funds are not there, it will be really difficult to find them.
For now, the company is intimidating political parties and organizations that received donations from FTX to return the money. While this week there was some interesting news ahead of the trial against Sam Bankman-Fried and his associates, since Nishad Singh, the former engineering director of the exchangepleaded guilty to fraud and conspiracy.
The aforementioned has been pointed out as the creator of the software intended to divert funds to Alameda Research. So it could provide relevant information about what was the fate of the billions of dollars that are missing today.