John Ray, chief executive officer of FTX Cryptocurrency Derivatives Exchange, arrives at bankruptcy court in Wilmington, Delaware, US, on Tuesday, Nov. 22, 2022.
Eric Lee | Bloomberg | Getty Images
The news comes after federal prosecutors announced plans to seize at least $500 million worth of FTX-connected assets in connection with their ongoing prosecution of FTX co-founder Sam Bankman-Fried.
The recovery will be a welcome boon to FTX customers, which are collectively owed at least $8 billion in missing assets after the crypto exchange imploded in November 2022.
The $5 billion figure regards “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,” FTX attorney Adam Landis told the court.
FTX’s collapse was connected, among other things, to a failure to correctly mark illiquid assets to market. FTX executives, including Bankman-Fried and Alameda Research CEO Caroline Ellison, borrowed against the value of the FTX-issued token FTT. Alameda controlled the vast majority of FTT coins circulating, similar to a publicly traded companies float, and could not have liquidated their position at full book value.
This is breaking news. Check back for updates.