Cryptocurrency exchange FTX has recouped approximately $7 billion of liquid assets, according to CEO John Ray.
The figure was revealed in the second interim report by the FTX Debtors, a group comprising FTX and its affiliates.
However, the ongoing hunt for more misplaced assets has been complicated due to the massive intermixing of funds.
The report estimates that the value of the pilfered customer assets is around $8.7 billion. Of this, nearly $6.4 billion was held in fiat and stablecoins.
The distinctions between these in FTX’s bookkeeping were unclear.
The report suggested that the misappropriation was not accidental.
It accused former FTX leaders and an unidentified senior attorney from the FTX Group of intentionally commingling and misusing customer deposits.
Consequently, tracing the source of substantial assets or differentiating between the company’s operational funds and customer deposits has become an arduous task, despite employing forensic accounting, asset tracing and recovery, and blockchain analytics experts.
The report drew attention to the misrepresentation of funds transfers from FTX customer accounts, facilitated by misleading banks and making numerous false representations.
Such misrepresentation was also seen in the statements made by former CEO Sam Bankman-Fried (SBF) to the US Congress.
The report repeatedly highlighted the involvement of a senior FTX attorney, who allegedly terminated a less senior lawyer for objecting to the company’s deceitful practices.
Misappropriated funds were allegedly used for political contributions, charity donations, investments, acquisitions, and luxury real estate purchases.
SBF, along with Gary Wang, Nishad Singh from FTX, and Alameda Research CEO Caroline Ellison, informally estimated FTX.com’s undisclosed liabilities to customers – a result of the misuse and intermingling of customer deposits – to be between $8.9 billion and $10 billion. This figure slightly exceeds the FTX Debtors’ current estimate.
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