FTX Recovers $5B, Still Not Enough To Pay Back Investors

Sam Bankman-Fried’s disgraced and failed crypto exchange FTX has recovered over $5 billion in cash and crypto assets, which it may use to repay customers and investors.

On top of the $5 billion in recovered assets is another $425 million in crypto held by the Securities Commission of the Bahamas -- where the exchange was based.

According to what FTX's attorney, Andrew Dietderich, told a Delaware bankruptcy court on Wednesday, this combined amount likely will not cover everything that was taken from customers and investors. The exact total amount remains unclear at this time.

On December 20, 2022, the crypto exchange claimed to have only been able to recover $1 billion, which can be seen now as a pronounced underestimation of the claims that FTX holds.

In initial bankruptcy filings, FTX management checked off the box indicating a figure between $1 billion and $10 billion. But federal regulators have estimated that FTX losses exceed $8 billion.

Before the company imploded this past November -- due to the illegal and secretive reinvestment of customer funds to Bankman-Fried's linked crypto-trading firm Alameda Research -- FTX was one of the largest crypto exchanges, now identifying over 9 million customer accounts.

What Bankman-Fried and Alameda did with the stolen money has become embarrassingly clear over the past two months, with Dietderich emphasizing: “It bought plans, houses, threw parties, made political donations.”

Alameda also used the money to make personal loans to its founders, sponsor the FTX Arena in Miami, a Formula 1 team, the multiplayer video game "League of Legends," the music festival Coachella, and many other businesses.

It could take months to recover the remainder of missing funds. Judge John Dorsey of the Delaware Bankruptcy Court has set a March 15 deadline, even though FTX’s new Chief Financial Officer Mary Cilia estimated in December that the company could do so by April.

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