The new FTX management has recovered $7 billion in liquid assets, a major advance in so-called asset recovery.
The recovery comes against the backdrop of new investigative reports from the now-defunct cryptocurrency exchange.
Recovered $7 billion in liquid assets
The collapse of FTX was one of the most controversial developments in the cryptocurrency industry, shaking the entire ecosystem. Once the blue-eyed boy of the industry, the exchange filed for Chapter 11 bankruptcy last year and was eventually revealed to be one of the industry’s biggest frauds. However, significant progress has since been made, with new FTX management announcing the recovery of $7 billion in liquid assets, saying “substantial progress” has been made in asset recovery.
The new FTX management also released an investigative report, and the new CEO revealed the truth about the exchange.
According to the report, the cryptocurrency group led by Sam Bankman-Fried made several false representations to the bank regarding accounts related to the use of trading firm Alameda Research accounts for client transactions. Previously, the banks concerned had repeatedly challenged Alameda Trading’s wire transfers and began to reject them. The report documents a specific instance in which a bank representative asked whether the Alameda Research account that received deposits from customers would be used to settle trades on the FTX exchange. In response, the report alleges that a senior FTX executive directed an Alameda employee to lie and said that clients sometimes confuse FTX and Alameda, but that all incoming and outgoing wires were used to settle Alameda transactions.
The report also claims that FTX created a new entity called North Dimension Inc., which was falsely advertised as a cryptocurrency trading firm with an average monthly trading volume of $10 million and 2,000 counterparties. In reality, however, North Dimension Inc. was a shell company used by FTX to receive customer deposits and withdrawals. When a lawyer found out about it, the company eventually fired the lawyer. John Ray III, CEO of FTX Entities and Chief Restructuring Officer, said:
“From the inception of the FTX.com exchange, FTX Group has mixed customer deposits and company funds and abused them wantonly at the direction and design of former executives.”
web of lies
complex relationship between Fortis The Alameda Research Center is the main reason for unraveling this question Sam Bankman-FriedThe leading crypto empire. According to the report, former Alameda Research CEO Caroline Ellison estimated in a private note written in March 2022 that FTX.com alone had a cash deficit of more than $10 billion. Ray said the report was in line with the new management’s goal of greater transparency. He further added that FTX’s reputation as a client-focused entity is a mirage, saying:
“The release of this report furthers our stated goals of transparency. The FTX Group’s attempt to portray itself as a client-centric leader in the digital age is a mirage. We will continue to report on our Analysis and findings, and remain committed to recovering as much value as possible for creditors.”
It is expected that follow-up reports will be issued on a regular basis, and follow-up reports will provide further disclosure of FTX and its daily operations.
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