According to FTX, approximately 413 million dollars worth of cryptocurrencies were stolen, which resulted in the cryptocurrency exchange going out of business.
In a report that was made public on January 17, the FTX debtors provided information as to what they had discovered.
They discovered that out of the 1.6 billion digital assets owned by FTX.com, digital assets with a value of $436 million were transferred to their “cold” storage.
These assets were transferred with the assistance of Bahamas security commissioners.
In addition, digital assets with a value of 323 million dollars were transferred to an unknown recipient.
From the total of $1.6 billion, $742 million is already in cold storage. The other millions, including the one that was stolen, are in the process of being moved to cold storage at this very moment.
Cold Storage
It is a safe place to store digital assets because the bitcoin key is not connected to the internet or network.
Major Digital Asset Shortage
FTX was established in 2019 and at one point had a value of $32 billion. After suffering a devastating loss during a liquidity crisis, it submitted its bankruptcy petition on November 11 of this year.
This happened after it was discovered that the hedge fund Alameda had been using FTX client funds to keep itself afloat.
On November 20, 2022, the business submitted a petition for bankruptcy under Chapter 11.
The owner had a total of $5.5 billion in liquid assets at the time. These included $1.7 billion in cash on hand, $300 million worth of securities, and $3.5 billion worth of crypto assets.
A court filing said that FTX owed about $3.1 billion to its 50 biggest creditors, and that about $8 billion in client cash had gone missing.
A rescue plan from a bigger competitor, Binance, was also pulled, adding to the exchange’s problems as traders rushed to take out billions of dollars’ worth of bitcoin.
Sam Bankman-Fried, who started the company, was arrested on December 17 in the Bahamas, where it was based.
He was extradited to the United States, where he was released on $250,000 bail. He was put under house arrest at the home of his parents, who are both law professors at Stanford University.
In January, Bankman-Fried pleaded not guilty to charges of fraud, conspiracy, breaking campaign finance laws, and laundering money.
Statement by John J. Ray III
The chief restructuring and executive officer of FTX debtors recently issued a statement pertaining to the progress in the case.
He revealed that they have been trying hard to maximize their recoveries and have made a lot of progress. Their team put in a tremendous amount of time and effort to gather preliminary information on the matter.
Their teams are working tirelessly to investigate the matter and bring in as much useful information as possible.
In October 2023, Bankman-Fried will go to court.
Ray, on the other hand, said that the information was still new and could change.
A cryptocurrency exchange that was not successful had a total of $413 million worth of digital assets stolen from it.
After his arrest in the Bahamas, Bankman-first Fried issued a statement in which he reiterated his earlier assertions that he did not steal money from customers and made the promise to return the money that belonged to his clients.
The former CEO said on his Substack blog on January 12: “I didn’t steal funds, and I certainly didn’t stash billions away,” He also said that FTX US was “fully solvent” and should be able to give all of its customers their money back.
CNBC says that FTX debtors are also looking into the cash that cryptocurrency exchange Binance got when it left FTX in 2021. This cash is worth about $2.1 billion.
In an interview with the media business in December, Binance CEO Changpeng Zhao put to rest fears that the exchange might have to return the funds.
He stated that the company is “financially OK” and has “very solid revenue.”
On the other hand, Bankman-Fried mentioned that it is ridiculous to see that the users of the FTX US platform are yet to be paid back for their funds.