The collapsed cryptocurrency exchange FTX has provided an update for investors and revealed that it has identified about $5.5 billion worth of digital assets for recovery.

Last week FTX said that it had located more than $5bn (£4.1bn) of assets, but now thanks to a “herculean investigative effort” it has identified $5.5 billion worth of digital assets – a number that includes $415 million in “hacked crypto.”

It comes after FTX filed for Chapter 11 bankruptcy protection last November when a multi-billion dollar hole was found in its balance sheet – amid reports of financial impropriety.

Image credit: FTX Arena

Investor update

“We are making important progress in our efforts to maximize recoveries, and it has taken a Herculean investigative effort from our team to uncover this preliminary information,” said John J. Ray III, CEO and chief restructuring officer of the FTX Debtors.

“We ask our stakeholders to understand that this information is still preliminary and subject to change,” Ray added. “We will provide additional information as soon as we are able to do so.”

According to FTX, the $415 million worth of crypto was hacked from the exchange’s accounts, and represents a sizable portion of the identified assets it is trying to recover.

FTX said the hacked crypto included “unauthorised third-party transfers” of $323 million out of (the international business) and $90 million out of FTX US.

Another $2 million of hedge fund Alameda Research’s crypto also was stolen, it added.

The missing crypto could be connected to a hack of FTX’s systems that was uncovered shortly after the company collapsed in November.

Meanwhile FTX’s advisors are also reviewing a $2.1 billion share repurchase payment from FTX to crypto exchange Binance in the third quarter of 2021.

Binance was the first outside investor in FTX, but Bankman-Fried bought out Binance’s stake in his company in 2021.

It should be noted that the decision by Binance in November to pull out of its deal to purchase FTX came days before the exchange collapsed into Chapter 11.

Binance said it had carried out a due diligence check on FTX’s balance sheet, which flagged “significant concerns” and convinced it to back out of the deal.

FTX collapse

FTX was once valued at $32 billion and former CEO and FTX co-founder Sam Bankman-Fried was arrested and extradited to the United States from the Bahamas.

Sam Bankman-Fried. Image credit: FTX

Then just before Christmas Bankman-Fried was freed on a $250m bail, but was ordered to remain under strict supervision at his parents’ home in Palo Alto, California, and wear an ankle bracelet.

Earlier this month he pleaded not guilty in a New York courtroom, where he faces eight criminal counts, including wire fraud and money laundering conspiracy.

His trial is scheduled for 2 October.

US prosecutors have already secured guilty pleas from two former top associates of Bankman-Fried’s – former Alameda chief executive Caroline Ellison and former FTX chief technology officer Gary Wang – who are co-operating with prosecutors and may testify at trial.

FTX’s new CEO, John J. Ray, has previously attested that at least $8 billion of customer assets were unaccounted for in the “worst” case of corporate control he’d ever seen.

Tom Jowitt

Tom Jowitt is a leading British tech freelancer and long standing contributor to Silicon UK. He is also a bit of a Lord of the Rings nut...

Recent Posts

Microsoft Xbox Marketing Chief Leaves For Roblox

Microsoft loses Xbox marketing chief amidst executive changes in company's gaming division, broader layoffs and…

8 hours ago

YouTube Test Community ‘Notes’ Feature For Added Context

YouTube begins testing Notes feature that allows selected users to add contextual information to videos,…

8 hours ago

FTC Sues Adobe Over Hidden Fees, Termination ‘Resistance’

US regulator sues Photoshop maker Adobe over large, hidden termination fees, intentionally difficult cancellation process

9 hours ago

Tencent To Ban AI Avatars From Livestream Commerce

Chinese tech giant Tencent to ban AI hosts from livestream video platform as it looks…

9 hours ago

TikTok US Ban Appeal Gets 16 September Court Date

Action by TikTok, ByteDance and creators against US ban law gets 16 September hearing date,…

10 hours ago

US Surgeon General Calls For Warning Labels On Social Media

US surgeon general calls for cigarette-style warning labels to be shown on social media advising…

11 hours ago