As part of its bankruptcy proceedings, the failed crypto exchange FTX informed a federal judge last week that it had recovered more than $5 billion in assets.
New documents released on Tuesday reveal the source for this figure, as well as details on billions of dollars’ worth of transactions now under review.
‘Liquid’ assets
With billions in lost customer funds, the new team charged with managing FTX’s bankruptcy—led by Enron veteran John Ray III—has begun the process of recouping the money. As he detailed in front of Congress in December, it is no easy feat, given the fact that the company once valued at $32 billion was using the accounting software QuickBooks.
In Friday's documents, FTX broke down the $5.5 billion it says it has recovered so far in "liquid assets," including $1.7 billion in cash and $0.3 billion in securities. More difficult to offload will be $3.5 billion in crypto assets, spread across a hot wallet and cold storage held by BitGo, as well as another $426 million in possession of the Bahamian government.
The main challenge will come from FTT, the token created by FTX that has cratered in value following the exchange’s collapse. FTX valued its FTT holdings at $529 million, reflecting its price at the time of the bankruptcy. It is unclear why FTX included it as a liquid asset. Another token created by FTX, Serum, is listed under illiquid holdings.
Brokerage assets and real estate
Included in the breakdown are assets held by Alameda, FTX’s affiliated trading firm. In the documents, FTX lays out $268 million in securities belonging to Alameda, the majority held in the investment manager Grayscale, including $197 million in Grayscale’s Bitcoin Trust ETF.
The trust, controlled by Barry Silbert’s Digital Currency Group, has come under fire recently due to alleged mismanagement, with its publicly traded shares declining by almost 60% over the last year.
While details on FTX’s extravagant real estate holdings in the Bahamas have been previously reported, the new documents detail where the company held over $250 million in property.
Sam Bankman-Fried's relationship with the ritzy Albany gated community was well-documented, including his $30 million penthouse apartment in a seaside residence called the Orchid. The new filing reveals that FTX actually held $166.1 million over 15 properties in Albany, including residences at seven of the luxury buildings.
The company also spent $28.8 million on its planned corporate headquarters, although construction never began on the property.
Political donations and other revelations
Bankman-Fried had a reputation as one of the most prodigious political donors, including making the second-largest donation to Joe Biden’s presidential campaign in 2020, although he later revealed that he had privately given as much money to Republicans as the $40 million donated to Democrats. (Many politicians have since begun returning funds and distancing themselves.)
According to the new documents, $93 million of political donations came from FTX—historical transactions the company said are under review.
Also under review are $2 billion in loans given by FTX to insiders in 2020 and 2021, as well as the $2.1 billion payment to Binance to buy out the rival exchange’s stake in the company—the transaction that precipitated FTX’s insolvency and eventual collapse.
