According to information sent to creditors today, FTX executives are actively attempting to recover hundreds of millions of dollars in cash from hundreds of bank accounts in an effort to address the situation surrounding the defunct cryptocurrency exchange.
The company’s new management, which took control when FTX founder Sam Bankman-Fried quit on Nov. 11, claimed to have identified assets worth more than $1 billion at a procedural hearing on Tuesday. The company discovered around $720 million in cash assets that have not yet been combined by the exchange in U.S. banking institutions approved by the Department of Justice to handle funds. Institutions in the United States already have another amount of nearly $500 million.
“We are reaching out to all of those banks and changing the signatories on the accounts so that we can get access to the accounts and move the cash as much as we can to authorized depository institutions,” FTX’s new Chief Financial Officer Mary Cilia, speaking under oath, said during part of bankruptcy proceedings.
According to Cilia, over $130 million in cash is held hostage in Japan, where local restrictions have primarily ringfenced funds for local clients.
She said that the majority of the remaining $423 million at unregistered U.S. institutions are at a single broker, though she declined to name the broker, and that an additional $6 million is being maintained for administrative costs including salaries. According to Cilia, $485 million is already in a licensed deposit facility.
Using custodial services like Bitgo, “ongoing attempts” are being made to identify the company’s global crypto assets and transfer them to cold wallets. Senior director Steve Coverick from FTX’s financial advisors Alvarez & Marsal spoke at the hearing.
The Chapter 11 bankruptcy hearings were expected to wrap up the exchange, but they have become more difficult due to Bankman-allegedly Fried’s lax record-keeping and governance. According to Coverick, the company’s new management had to go over customer terms and conditions that were kept in several locations, including Google Drive and Slack.
According to Cilia, the company currently anticipates being able to file the declaration of assets and financial position that is necessary under American bankruptcy law in April. The business is still figuring out how many employees it has worldwide—Cilia put the number at 220—and how much money was taken out prior to the bankruptcy.
