FTX Reports $415 Million of Crypto Stolen
WHAT YOU SHOULD KNOW
- FTX reported that $415 million worth of digital currency had been stolen from its accounts.
- FTX and Alameda were crippled by a surge of withdrawals, leading to their filing for bankruptcy in November.
- The exchange advisors are currently assessing a $2.1 billion share repurchase from FTX to the crypto exchange Binance.
On Tuesday, FTX, a crypto firm that is facing bankruptcy, reported that $415 million worth of digital currency had been stolen from its accounts. This amount constitutes a significant portion of the assets that the company is attempting to reclaim.
At a presentation focused on “Maximizing FTX Recoveries,” attorneys and advisors for FTX debtors reported that they have identified approximately $5.5 billion in total liquid assets that can be recovered.
FTX.com and FTX US reported a total of $415 million in unauthorized third-party transfers, according to a statement. Additionally, Alameda Research’s crypto hedge fund reported a loss of $2 million. These losses could be linked to the hack of FTX’s systems that was discovered after November’s collapse.
According to Elliptic, a blockchain analytics firm, the stolen cryptocurrency was estimated to be worth $477 million at the time of the incident.
FTX, a cryptocurrency exchange, and its sister hedge fund Alameda were crippled by a surge of withdrawals, leading to their filing for bankruptcy. In December, the former CEO and founder Sam Bankman-Fried were accused by federal prosecutors of fraud and money laundering. Bankman-Fried has denied the allegations and was released on a $250 million bond in preparation for his trial in October.
FTX’s advisors are currently assessing a $2.1 billion share repurchase from FTX to the crypto exchange Binance, which is expected to take place in the third quarter of 2021. Binance was the initial external investor in FTX; however, Sam Bankman-Fried purchased Binance’s stake in the company in 2021.
In December, Binance CEO Changpeng “CZ” Zhao was questioned on CNBC about the possibility of a $2.1 billion clawback being part of FTX’s bankruptcy proceedings.
Zhao responded to the question of whether he was willing to return the money by stating that he would leave it to the lawyers. He expressed confidence that his legal team was competent enough to handle the situation.
FTX’s legal and advisory team has created a 20-page presentation that outlines the company’s assets and potential avenues for debtors to be repaid. This includes a large amount of property, estimated to be worth hundreds of millions of dollars, located in the Bahamas, where Sam Bankman-Fried resided and managed the business.
During the restructuring process, John Ray, acting CEO of FTX, declared in a Tuesday statement that the team has put in an extensive investigative effort to uncover preliminary information and that they are making significant strides in their attempts to maximize recoveries.
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