FTX "Locates" US$5B as Hunt for Missing Funds Continues

Bankrupt cryptocurrency exchange FTX has recovered more than US$5 billion in cash and other liquid assets, and is hoping to monetise additional assets with a book value of more than US$4.6 billion.

"We have located over $5 billion of cash, liquid cryptocurrency and liquid investment securities measured at petition date value. [It] just does not ascribe any value to holdings of dozens of illiquid cryptocurrency tokens, where our holdings are so large relative to the total supply that our positions cannot be sold without substantially affecting the market for the token," said Landis Rath & Cobb attorney Adam Landis on FTX's behalf in a US bankruptcy court on Wednesday.

While the amount is substantially higher than the US$1 billion believed to be held by FTX in December, Landis noted that it's still unclear just how much is owed to FTX's creditors. Initial bankruptcy filings estimates that the amount is somewhere between US$1 billion and US$10 billion.

Furthermore, according to company attorney Andrew G. Dietderich, FTX advisers have identified more than 9 million customer accounts, but the now defunct exchange is still unable to provide details about how much money creditors will be able to receive.

Landis also said that former FTX CEO Sam Bankman-Fried (SBF) had instructed FTX and Alameda co founder Gary Wang to create a "backdoor" for the trading arm to borrow from FTX customers.

"We know what Alameda did with the money. It bought planes, houses, threw parties, made political donations. It 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," Landis explained, adding that these expenditures led to a "shortfall in value" to repay the platform's creditors and customers.

In Novemeber, SBF denied claims that he created a “back door” to move US$10 billion in customer funds from FTX to Alameda.

“I certainly didn’t build the back door in there and I don’t know exactly what they’re referring to,” SBF told crypto whistleblower Tiffany Fong who conducted the interview, adding that he could not have built a backdoor because he “don’t even know how to code”.

UOB embroiled in FTX saga?

Meanwhile, a report by Financial Times (FT) has revealed that SBF invested US$5 million in a fund launched by UOB Venture Management (UVM), an arm of Singaporean bank United Overseas Bank and Signum Capital. In December 2021, Business Times reported that the fund's first investment was into the Series B1 round of FTX.

Signum did not respond to a request for comment from FT while UOB declined to comment.