FTX lawyers say they have recovered $5 billion in assets

By Allison Morrow, CNN

FTX officials overseeing its bankruptcy have recovered more than $5 billion in cash and other liquid assets that may be used to help repay creditors, a lawyer for the failed crypto firm said during a bankruptcy court hearing Wednesday.

That disclosure significantly raises the estimated amount of funds FTX claims to hold. Last month, FTX lawyers submitted filings that showed the company and its affiliates had a total of $1.2 billion in cash.

The lawyers also said they had identified more than 9 million creditors — far more than earlier estimates of around 1 million.

It remains unclear how much creditors will get back of the funds that were frozen after trading was halted as FTX began to unravel in November. The firm filed for bankruptcy on November 11 in the midst of a devastating liquidity crunch.

Since then, FTX’s co-founder Sam Bankman-Fried has been charged with orchestrating what prosecutors call one of the “biggest financial frauds in American history.”

He pleaded not guilty last week to eight counts of fraud and conspiracy in federal court in New York. Prosecutors say Bankman-Fried deceived customers and investors in FTX, stealing billions’ worth of deposits to cover losses at his hedge fund, Alameda Research, while lying to investors about FTX’s operations.

FTX’s implosion is expected to wipe out its equity investors, dozens of whom were identified in court filings this week. They include celebrities such as NFL star Tom Brady and supermodel Gisele Bundchen.

Separately Wednesday, the New York Times asked the judge overseeing the criminal case against Bankman-Fried to unseal court records identifying two people who agreed to co-sign his lofty $250 million bond.

There are four co-signers on the bond, including Bankman-Fried’s parents, who used the their home to secure their son’s release. Under the terms of his bail, neither Bankman-Fried nor the co-signers will have to pay any amount of that bond unless Bankman-Fried fails to appear in court or violates other conditions of set by the judge.

Bankman-Fried surrendered his passport and must remain under house arrest at his parents’ home.

His attorneys have asked the judge to redact the names and addresses of the two unidentified co-signers out of concern for their privacy and safety.

Judge Lewis Kaplan initially agreed to redact the names but said he would give any interested parties until Thursday to request their unsealing. Inner City Press, a local news outlet, also asked the judge to make the names public.

— CNN’s Kara Scannell contributed to this report.

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