FTX reports $415 million in hacked crypto, Bankman-Fried says FTX US is solvent

FTX reports 5 million in hacked crypto, Bankman-Fried says FTX US is solvent

By Dietrich Knauth

(Reuters) – Bankrupt cryptocurrency exchange FTX said in a report to creditors on Tuesday that about $415 million in cryptocurrency had been stolen in hacks.

FTX has said that it had recovered over $5 billion in crypto, cash and liquid securities, but that there were still significant shortfalls on both the international and US crypto exchanges. FTX attributed some of the shortfall to hacks, saying that $323 million in crypto had been hacked from FTX’s international exchange and $90 million had been hacked from its US exchange since it filed for bankruptcy on November 11.

The accused founder Sam Bankman-Fried later challenged aspects of the company’s report in a blog post.

Bankman-Fried, who has been accused of stealing billions of dollars from FTX clients to pay off debt incurred by his crypto-focused hedge fund, Alameda Research, pushed back against FTX’s calculations late Tuesday, saying the company’s lawyers at Sullivan & Cromwell had presented an “extremely misleading” picture of the company’s finances.

Bankman-Fried said FTX has more than enough cash to pay back U.S. customers, who he says are owed between $181 million and $497 million based on his “best guess.” Bankman-Fried has not had access to FTX records since he stepped down as CEO in November.

A spokesperson for Sullivan and Cromwell declined to comment. Lawyers for the firm said in a recent filing that they have rejected Bankman-Fried’s attempt to remain involved in the company’s bankruptcy proceedings.

Bankman-Fried has pleaded not guilty to the fraud charges and is scheduled to stand trial in October.

See also  Overwatch 2 Sombra rework to arrive with Season 4 update at the latest

FTX did not provide an estimate of the amount owed to FTX’s U.S. or international customers, and it did not immediately respond to questions about Bankman-Fried’s blog post.

FTX provided some additional details on the recovery effort on Tuesday, saying it had recovered $1.7 billion in cash, $3.5 billion in liquid cryptocurrency and $300 million in liquid securities.

“We are making progress in our efforts to maximize recovery, and it has taken a herculean investigative effort by our team to uncover this preliminary information,” Ray said in a statement.

The crypto assets recovered to date include $685 million in Solana, $529 million in FTX’s proprietary FTT token, and $268 million in bitcoin, based on crypto prices on November 11, 2022. Solana, which was hailed by Bankman-Fried, lost most of their value in 2022.

During FTX’s initial investigation into hacks of the system, it uncovered an asset seizure in November by the Securities Commission of the Bahamas, which led to a dispute between FTX’s US-based bankruptcy team and Bahamian regulators.

The two sides settled their differences in January, and Ray said Tuesday that the Bahamian government was holding $426 million for creditors.

Bahamian Prime Minister Philip Davis referred to the dispute during a Tuesday event at the Atlantic Council in Washington, saying that Ray’s team had “come around” and accepted that the seizure of Bahamian assets “was appropriate and may have saved the day for many of the investors in FTX.”

(Reporting by Dietrich Knauth in New York; Juby Babu in Bengaluru; and Jasper Ward in Washington; Editing by Noeleen Walder, Amy Stevens, Matthew Lewis and Gerry Doyle)

See also  5 games that would make for watchable TV dramas like The Last of Us

You may also like...

Leave a Reply

Your email address will not be published. Required fields are marked *