A new development in the FTX saga provides a light at the end of the tunnel. A bankruptcy attorney for the company announced Wednesday at a hearing that they had recovered more than $5 billion in assets. This amount does not include the $425M withheld by the Bahamas Securities Commission.
Adam Landis, an attorney with Sullivan & Cromwell, appears to be the bearer of good news. Last Wednesday, January 11, he confirmed that they had located more than $5B in cash, liquid cryptocurrencies, and other liquid securities.
To make the news even better, this amount does not include the holdings of illiquid tokens held by FTX. According to Landis, the company's holdings of these tokens are virtually unsaleable. Attempting to liquidate these positions would affect the entire token market.
The news raises the amount that FTX's new board had announced in mid-December. Last December 20, they said they only had just over $1B.
Yet, FTX is far from reaching a resolution point — the total amount FTX owes its creditors is still unknown. When the exchange filed for bankruptcy, they stated that they owed between $1B to $10B to their creditors
This range is still too large to determine what impact these newly-found $5B will have.
According to Landis, the size of the reduction still needs to be determined. He said it still depends on the size of the claims and all possible recovery efforts.
Mary Cilia, the company's CFO, said in December that they hoped to be done by April 2023. However, Judge John Dorsey of the Delaware bankruptcy court set a deadline of March 15.
Will the new FTX board make that date? We have yet to find out. For now, every dollar counts.
