Half of the $181 million worth of assets identified by FTX US, the U.S.-based arm of Sam Bankman-Fried’s bankrupt crypto empire, was “subject to unauthorized third-party transfers” following its bankruptcy filing, according to a presentation made to the FTX creditor committee today.
It’s taken a “Herculean investigative effort for our team to uncover this preliminary information,” newly appointed FTX CEO John Ray said in a statement about the meeting.
Unauthorized transfers from FTX.com made headlines after hundreds of millions were withdrawn the day after the company filed Chapter 11 bankruptcy protection. The $90 million transferred from FTX USA was not disclosed by the company.
According to the FTX presentation, $88 million of the remaining FTX US assets have been transferred into a cold storage wallet. Another $3 million is pending transfer.
“The assets identified as of the Petition Date [the day the company filed for bankruptcy] are substantially less than the aggregate third-party customer balances suggested by the election ledger for FTX US,” the restructuring team said in a statement.
The presentation included a graphic showing that FTX believes that $415 million in crypto assets was hacked from accounts of the exchange. According to the presentation, $323 Million were from FTX.com while another $90 Million was from FTX.US. Another graphic showed Alameda’s funds worth $1.6 billion in a “hot” crypto wallet. This means they’re being kept at an address where they can hypothetically be traded or moved, and that they’re also accessible online.
FTX, Bankman-Fried’s vast crypto empire, fell in early November because of a report that its trading desk, Alameda Research, held billions worth of FTX’s exchange token FTT against billions worth of liabilities. If Alameda had sold its FTT to repay creditors, it would have crashed the token’s price.
Customers rushed to withdraw funds from FTX, which forced it to close down its exchange. Binance offered to takeover FTX, but the company backed off and filed for bankruptcy. Bankman-Fried was later taken into custody and charged with eight financial crime. His trial is scheduled for October in New York.
Alameda Research, FTX US and more than 130 other entities filed for bankruptcy alongside FTX.com.
But as recently as last week, Bankman-Fried claimed through his new Substack newsletter that FTX is “fully solvent.” He writes that the company had $350 million in cash when he resigned as CEO, the same day FTX filed for bankruptcy.
He’s now facing criminal charges, including money laundering and wire fraud, from federal prosecutors. He pleaded not guilty earlier this month to all of them. While Bankman-Fried awaits his trial, scheduled to begin in October, he’s under house arrest at his parents’ home in Palo Alto, California.
Slide deck that was prepared by the Official Committee of Unsecured Creditors Monday included details about FTX US assets.
In it, FTX’s restructuring team also said it has identified $5.5 billion worth of liquid assets to day, including $1.7 billion in cash, $3.5 billion in cryptocurrencies and another $300 million worth of liquid securities. These numbers echo the statements made by Adam Landis, FTX’s lead attorney, during a court hearing on Wednesday.
Editor’s note – This article and the headline were updated to clarify FTX US has revealed that assets valued at $90million were transferred via “unauthorized third party transfers”.