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FTX uncovers $5 billion in liquid assets amid bankruptcy proceedings

The firm had roughly 9 million clients.

Published: January 11, 2023 3:50pm

Updated: January 11, 2023 5:19pm

A lawyer for cryptocurrency firm FTX announced in a bankruptcy hearing that the company had located more than $5 billion in liquid assets belonging to the company.

That sum includes cash, cryptocurrency and other investments and is separate from the amounts in possession of the Securities Commission of the Bahamas, which is worth roughly $425 million, according to Yahoo News.

Andrew Dietderich, a lawyer advising FTX, further addressed allegations that hedge fund Alameda Research, a sister firm of FTX, illegally used the crypto company's investor assets to finance its investments.

"We know what Alameda did with the money," he said. "It bought planes, houses, threw parties, made political donations, made personal loans to its founders. It sponsored the FTX Arena in Miami, a Formula One team, the League of Legends, Coachella, and many other businesses, events and personalities. It gambled on cryptocurrency investments, often unsuccessfully."

Amid the discoveries, the judge granted a motion to seal the names of FTX customers for a further three months. The firm had roughly 9 million clients.

FTX suffered a cataclysmic collapse last year when investors simultaneously attempted to withdraw their stakes in the firm, leaving it unable to fully remunerate them. Reports quickly emerged of missing investor assets and suspicious transfers to Alameda.

FTX founder Sam Bankman-Fried has been extradited to the U.S. and is awaiting trial under house arrest at his parents' California home. He has pleaded not guilty to the many fraud charges he faces.

FTX Co-founder Gary Wang and former Alameda CEO Caroline Ellison, meanwhile, have pleaded guilty to criminal charges and are cooperating with prosecutors.

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