$740M in Crypto Assets Recovered in FTX Bankruptcy

$740M in Crypto Assets Recovered in FTX Bankruptcy

  • Business
  • November 23, 2022
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The company hired to freeze assets from failed cryptocurrency exchange FTX Trading said it has recovered $740 million in assets so far, a fraction of the potential billions of dollars likely missing from FTX’s coffers.

Cryptocurrency custodian firm BitGo revealed the number in court filings on Wednesday. FTX shut down BitGo hours after the company filed for bankruptcy earlier this month.

The biggest concern for many FTX clients is whether they will ever see the money they have invested on the platform again. Experts told CBS MoneyWatch that customers will likely have to wait years to get their money back, while many may never get the money back.

FTX failed after its founder and former CEO, Sam Bankman-Fried, and his lieutenants used client funds to place bets in Bankman-Fried’s trading company Alameda Research. The $740 million figure was as of Nov. 16, and assets have continued to be recovered since then.

The crypto world was rocked by the bankruptcy of FTX as it witnessed one of the largest exchanges collapse for about a week. The Company and Bankman-Fried are under investigation in the United States and abroad for possible securities violations. Securities regulators in the Bahamas — where FTX is based — seized some of the company’s assets days after FTX filed for bankruptcy in the US

Regulators in California and Texas said they are also investigating FTX.

FTX crypto exchange bankruptcy sends shockwaves across the market 06:23

Issues with FTX came to light earlier this month when Bankman-Fried told a group of investors that the company needed about $8 billion to secure its users’ crypto assets. The company experienced the crypto version of a bank run earlier this month as users withdrew about $5 billion in a single day amid growing concerns about FTX’s solvency.

Bankmann-Fried tweeted Wednesday that he plans to speak at a New York Times event on November 30.

Assets recovered by BitGo are now locked in South Dakota in what is known as “cold storage,” meaning the cryptocurrency is stored on hard drives that are not connected to the internet. BitGo offers “Qualified Custodian” services under the laws of the state of South Dakotan.

The recovered assets include not only Bitcoin and Ethereum, but also a collection of smaller cryptocurrencies that vary in popularity, such as the Shiba Inu coin.

California-based BitGo has a long history in asset recovery and asset protection. They were tasked with securing assets after cryptocurrency exchange Mt. Gox failed in 2014.

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