FTX Reports 415M in Hacked Cryptos Bankman Fried Says FTX US

FTX Reports $415M in Hacked Cryptos, Bankman-Fried Says FTX US is Solvent

Jan 17 (Portal) – Bankrupt crypto exchange FTX said in a report to creditors on Tuesday that about $415 million in cryptocurrency had been stolen in hacks.

FTX has said it has recovered over $5 billion in crypto, cash and liquid securities but that there are significant shortfalls on both its international and US crypto exchanges. FTX attributed some of the shortfall to hacks, saying $323 million worth of crypto had been hacked by FTX’s international exchange and $90 million by the US exchange since they filed for bankruptcy on Nov. 11 have registered.

Defendant founder Sam Bankman-Fried later questioned aspects of the company’s report in a blog post.

Bankman-Fried, who has been accused of stealing billions of dollars from FTX clients to pay off debts at his crypto-focused hedge fund Alameda Research, later backed down on FTX’s calculations late Tuesday, saying the firm’s lawyers at Sullivan & Cromwell presented an “extremely misleading” picture of the company’s finances.

Bankman-Fried said FTX has more than enough cash to repay US customers it owes between $181 million and $497 million at its “best estimate.” Bankman-Fried has not had access to FTX records since resigning as CEO in November.

A spokesman for Sullivan and Cromwell declined to comment. Lawyers for the firm said in a recent court filing that they dismissed Bankman-Fried’s efforts to remain involved in the company’s bankruptcy proceedings.

Bankman-Fried has pleaded not guilty to the fraud charges and is due to appear in court in October.

FTX did not provide an estimate of the amount owed to FTX’s US or international clients and did not immediately respond to questions about Bankman-Fried’s blog post.

FTX provided some additional details on its recovery efforts on Tuesday, saying it had recovered $1.7 billion in cash, $3.5 billion in liquid cryptocurrency and $300 million in liquid securities.

“We are making progress in our efforts to maximize recovery and it has taken a Herculean investigative effort by our team to uncover this preliminary information,” Ray said in a statement.

Crypto assets recovered to date include $685 million in Solana, $529 million in FTX’s proprietary FTT token, and $268 million in Bitcoin based on crypto prices as of November 11, 2022. Solana, praised by Bankman-Fried lost most of its fortune in 2022.

During FTX’s first investigation into hacks in its system, it uncovered a November seizure of assets by the Securities Commission of the Bahamas, sparking a dispute between FTX’s US-based bankruptcy team and Bahamian regulators.

The two sides settled their differences in January, and Ray said Tuesday the Bahamian government had $426 million ready for creditors.

Referring to the dispute during an event Tuesday at the Atlantic Council in Washington, Bahamas Prime Minister Philip Davis said Ray’s team “came around” and accepted that the seizure of assets in the Bahamas “was appropriate and perhaps many of the saved the day for investors in FTX.”

Reporting by Dietrich Knauth in New York; Juby Babu in Bengaluru; and Jasper Ward in Washington. Edited by Noeleen Walder, Amy Stevens, Matthew Lewis and Gerry Doyle

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