While there is some optimism that creditors of cryptocurrency exchange FTX will recover their lost funds, the recovery process is likely to take at least two years. This is what sources with direct knowledge of the matter told The Post in an article published on Wednesday (25).
According to the report, executives representing creditors in the case believe it will be possible to recover up to half or two-thirds of the $8 billion in losses. However, it is likely that nearly a million creditors will have to wait a long time for this to materialize.
The most optimistic about asset recovery is FTX’s new CEO, John Ray. Not long ago, as reported by CriptoFácil, Ray told the court that he had found about $5 billion in FTX’s liquid assets. Money that can help pay people and FTX investors who are at a loss.
The issue is that valuing these assets may not be an easy task. After all, things get more complicated when it comes to illiquid investments in digital assets or volatile venture capital. This means that this could mean less money being distributed to creditors, according to the report.
“We don’t know if Ray would value the money going back to people based on what their cryptocurrencies were worth at the time or what they are now,” said one of the lawyers involved in the lawsuit.
The collapse of FTX and the fried arrest of Bankman
After the stock market crashed and filed for bankruptcy, FTX founder Sam Bankman-Fred was indicted on charges of securities fraud. Prosecutors allege he stole money from FTX clients’ wallets to pay for trades at his Alameda Research hedge fund. Moreover, he allegedly used the funds to make political contributions in order to influence government oversight of the cryptocurrency industry.
On December 12, Sam Bankman-Fried (SBF) was arrested by Bahamas authorities after the US government filed charges against him. After posting $250 million bail, the SBF was able to go to his family home in Palo Alto, California, under house arrest – where he remains today.
Last week, the US government seized nearly $700 million in assets belonging to the Security Belt forces. These assets, which have been in dispute in recent months, are now in US custody.