John Ray, chief executive officer of FTX Cryptocurrency Derivatives Exchange, arrives at bankruptcy court in Wilmington, Delaware, US, on Tuesday, Nov. 22, 2022.
Eric Lee | Bloomberg | Getty Images
The recovery will be a welcome boon to FTX customers after the crypto exchange imploded in November. FTX’s new CEO, John J. Ray, previously attested that at least $8 billion of customer assets were unaccounted for in the “worst” case of corporate control he’d ever seen.
The $5 billion figure doesn’t include any illiquid cryptocurrency assets, FTX attorney Adam Landis told the court. He said the company’s holdings are so large that selling them would substantially affect the market, driving down their value.
FTX’s collapse was related to, among other things, a failure to correctly mark illiquid assets to market. FTX executives, including Bankman-Fried and Alameda Research CEO Caroline Ellison, borrowed against the value of the FTX-issued token FTT. Alameda controlled the vast majority of FTT coins circulating, similar to a publicly traded companies float, and could not have liquidated their position at full book value.
Correction: This article has been updated to reflect that FTX attorney Adam Landis told the court the $5 billion figure doesn’t include any illiquid cryptocurrency assets.