John Ray III, who has taken over as CEO and chief restructuring officer of FTX, said that FTX leaders and advisors have met with the Official Committee of Unsecured Creditors (UCC) as part of FTX's ongoing bankruptcy proceedings and determined that FTX has approximately $5.5 billion in liquid assets, meaning there is a "substantial shortfall" of assets at both FTX U.S. and FTX International.
FTX announced in a Tuesday, Jan. 17 press release that they shared a presentation with the UCC confirming $5.5 billion in liquid assets, which includes $1.7 billion in cash, $3.5 billion in crypto assets and $0.3 billion in securities. The release stated that the assets that have been confirmed are significantly less than total customer balances listed on FTX U.S.'s ledger.
"We are making important progress in our efforts to maximize recoveries, and it has taken a Herculean investigative effort from our team to uncover this preliminary information," Ray said, according to the press release. "We ask our stakeholders to understand that this information is still preliminary and subject to change. We will provide additional information as soon as we are able to do so."
FTX is facing a class action lawsuit from a group of FTX customers who are seeking to ensure that they are repaid in FTX's bankruptcy proceedings, Coin Desk reported. The lawsuit was filed with the U.S. Bankruptcy Court for the District of Delaware, which is the same court with which FTX filed for bankruptcy in November.
The court filing alleges, "FTX executive defendants failed to institute any corporate controls and were therefore able to cause, direct or allow the misappropriation of billions of dollars in customer funds and digital assets deposited or held worldwide at FTX." The plaintiffs are asking to be given "priority to repayment of customer property."
FTX founder and former CEO Sam Bankman-Fried was indicted in December on multiple wire fraud charges, as well as conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering and conspiracy to violate U.S. campaign finance laws, Forbes reported.
Bankman-Fried, 30, pleaded not guilty earlier this month, and his trial is set to begin on Oct. 2, according to Reuters. He could face up to 115 years in prison. Manhattan U.S. Attorney Damian Williams has said that the investigation into FTX and Bankman-Fried's role in the crypto exchange's collapse is ongoing, and his office will continue to provide updates as new information is confirmed. Two of Bankman-Fried's former associates, Caroline Ellison and Gary Wang, pleaded guilty to defrauding investors in December and have been cooperating with prosecutors.
