FTX Bankruptcy Team Says the Exchange Owed Customers $8.7B – According to a recent report by the FTX team, which conducted a thorough examination of the financial operations of the defunct exchange, it was revealed that the company had mishandled and combined customer deposits, resulting in a debt of $8.7 billion owed to its customers.
About $6.4 billion of the money the FTX.com exchange owed its customers was “in the form of fiat currency and stablecoin that had been misappropriated,” according to the report filed on Monday. About $7 billion in liquid assets have been recovered so far, and those searching the company’s assets “anticipate additional recoveries.”
“The image that the FTX Group sought to portray as the customer-focused leader of the digital age was a mirage,” said John J. Ray III, the CEO who is trying to recover money for creditors, in a statement. “From the inception of the FTX.com exchange, the FTX Group commingled customer deposits and corporate funds, and misused them with abandon at the direction and by the design of previous senior executives.”
A product of months of analysis and forensic auditing, the new report paints a picture of company management and at least one senior lawyer knowingly misusing customer money, saying they “lied to banks and auditors, executed false documents, and moved the FTX Group from jurisdiction to jurisdiction, taking flight from the United States to Hong Kong to the Bahamas, in a continual effort to enable and avoid detection of their wrongdoing.”
Ray, who previously conducted an initial examination in April, has now submitted a 33-page review as a follow-up. This review sheds light on further instances of improper activity that occurred under the supervision of Sam Bankman-Fried, the founder and former CEO of the company.
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Bankman-Fried is currently facing criminal charges and is scheduled for trial in New York in October. The company is currently undergoing bankruptcy proceedings in Delaware, with Ray leading the efforts to resolve its affairs since its collapse in November. There have been indications that the operations of the exchange might be revived under the name FTX 2.0.