During a Delaware bankruptcy hearing, a judge approved procedures to market some assets of bankrupt cryptocurrency exchange FTX, with attorneys claiming the company has located an additional $5 billion in cash and liquid crypto assets since filing for bankruptcy in November.
Photo Credit: ShutterstockDuring the second-day hearing in Wilmington, Delaware, FTX attorney Andrew G. Dietderich updated the bankruptcy court on steps new leadership has taken to rectify the operational failures that led the digital asset exchange to seek Chapter 11.
These steps include identifying more than nine million customer portfolios holding about $20 billion of various digital assets. Those located funds exclude almost $450 million in digital assets currently in the custody of the Securities Commission of The Bahamas.
“The debtors filed for Chapter 11 60 days ago. The level of activity since has been extraordinary,” Dietderich explained to U.S. Bankruptcy Judge John T. Dorsey. “This will put us in a position to describe the financial results of the debtors accurately for the first time.”
Sam Bankman-Fried, co-founder and former CEO, is currently free on a $250 million bond after being indicted, arrested and extradited from the Bahamas to the U.S. on charges of wire and securities fraud and money laundering.
“Maybe it was only four people who committed this allegedly massive fraud of billions of dollars and no one else at the organization knew about it,” Sarkessian argued. “But there needs to be an investigation before those causes of action are sold.”
Dietderich said the debtors have yet to make a decision on any sales and will be entertaining offers from interested bidders to determine the appropriate track forward.
“We have not made a decision to sell anything and we’re not asking for your permission to sell anything today,” Dietderich stated. “This is part of a process to look across all of our options with a difficult set of assets.”
The court also granted a contested motion from the debtor to file certain documents under seal to protect the personal information of creditors and customers, saying FTX had adequately shown there are extraordinary circumstances that justify the redactions of the information. Specifically, Judge Dorsey agreed to allow for the redaction for the next three months — down from the six months requested by the debtor — to allow parties to try and decipher which creditors are customers of FTX and which are more traditional creditors.
Judge Dorsey made this decision after outlining how said customer information is a valuable asset of the debtor that comprises sensitive trade secrets in the case.
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Source: https://www.law360.com/articles/1564774
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