As part of bankruptcy proceedings, failed crypto exchange FTX told a federal judge last week that it has returned more than $5 billion in assets.
New documents released on Tuesday reveal the source of the figures, as well as details of the billion-dollar transaction currently under investigation.
‘liquid’ assets
With billions in customer funds lost, the new team in charge of managing FTX’s bankruptcy—led by Enron veteran John Ray III—has begun the process of recovering the money. As he detailed in front of Congress in December, it was not easy, given the fact that the company is valued at $32 billion using QuickBooks accounting software.
In Friday’s document, FTX broke down $5.5 billion it said it has recovered so far in “liquid assets,” including $1.7 billion in cash and $0.3 billion in securities. More difficult to remove is $3.5 billion in crypto assets, spread across hot wallets and cold storage held by BitGo, as well as another $426 million held by the Bahamian government.
The main challenge will come from FTT, the token created by FTX that has cratered in value after the collapse of the exchange. FTX valued FTT’s holdings at $529 million, reflecting its value at the time of bankruptcy. It is unclear why FTX is included as a liquid asset. Another token created by FTX, Serum, is listed in illiquid holdings.
Brokerage and real estate assets
Included in the breakdown are assets held by Alameda, an affiliated trading company of FTX. In the document, FTX placed out $268 million in securities belonging to Alameda, the majority of which are held by the Grayscale investment manager, including $197 million in the Grayscale Bitcoin Trust ETF.
The trust, controlled by Barry Silbert’s Digital Currency Group, recently collapsed due to mismanagement, with its publicly traded shares down nearly 60% in the past year.
While details of FTX’s real estate holdings in the Bahamas have been reported before, the new document details where the company owns more than $250 million in real estate.
Sam Bankman-Fried’s ties to Albany’s posh gated community are well-documented, including a $30 million penthouse apartment in an oceanfront home called Orchid. New filings show that FTX actually holds $166.1 million through 15 properties in Albany, including homes in seven luxury buildings.
The company also spent $28.8 million on a planned corporate headquarters, although construction never began on the property.
Political donations and other revelations
Bankman-Fried has a reputation as one of the most impressive political donors, including giving the second largest donation to the presidential campaign of Joe Biden in 2020, although he later revealed that he had personally given money to Republicans as $40 million was donated. Democrats. (Many politicians have since withdrawn their funds and recused themselves.)
According to the new documents, $93 million in political donations came from FTX—a historic transaction that the company says is under review.
Also under scrutiny is the $2 billion in loans granted by FTX to insiders in 2020 and 2021, as well as the $2.1 billion payment to Binance for the purchase of rival exchange shares in the company — a transaction that led to FTX’s insolvency and eventual collapse.
Learn how to navigate and strengthen trust in your business with The Trust Factor, a weekly newsletter that examines what leaders need to succeed. Log in here.