The FTX logo displayed on a phone screen is seen through broken glass in this illustrative photo taken in Krakow, Poland on November 14, 2022.
Jakub Porzycki/NurPhoto via Getty Images
Bankrupt crypto firm FTX said on Tuesday that $415 million in crypto was hacked from its exchange account, representing a large portion of the identified assets the company is trying to recover.
In a presentation entitled “Maximizing FTX Recovery”, lawyers and advisers for FTX debtors updated the total liquid assets identified for recovery, and said that the value was about $5.5 billion.
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However, it included “unauthorized third-party transfers” of $323 million from FTX.com (international business) and $90 million from FTX US, the company said in a statement. Another $2 million from the Alameda Research crypto hedge fund was also stolen. The missing crypto can be linked to a hack of the FTX system that was discovered shortly after the company collapsed in November.
At the time, the stolen crypto was worth $477 million, according to blockchain analytics firm Elliptic.
FTX filed for bankruptcy after a wave of withdrawals crippled the exchange and its sister hedge fund Alameda. Founder and former CEO Sam Bankman-Fried was indicted by federal prosecutors on fraud and money laundering charges in December. Bankman-Fried pleaded not guilty to the charges in January, and has been released on $250 million bail ahead of his trial, which is set for October.
FTX Advisors also reviewed a $2.1 billion share buyback 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 Binance’s stake in the company in 2021.
In an appearance on CNBC in December, Binance CEO Changpeng “CZ” Zhao was asked about a possible $2.1 billion clawback as part of the FTX bankruptcy process.
“I think we’ll leave it to the lawyers,” Zhao said, when asked if he was ready to send the money back. “I think our legal team can handle it.”
A 20-page presentation from FTX’s attorneys and advisors provides details of FTX’s assets and where they are looking for potential recoveries to be returned to creditors. That includes hundreds of millions of dollars in property in the Bahamas, where Bankman-Fried lives and runs a company.
“We are making significant progress in our efforts to expand the recovery, and it took a Herculean investigative effort from our team to uncover this initial information,” John Ray, who served as CEO at FTX during the restructuring, said in a statement Tuesday.
Although it separates liquid from liquid tokens, the presentation includes $529 million in FTX’s self-issued tokens, FTT, under the exchange’s “liquid” assets. FTT has lost more than 90% of its value since early November.
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