By Dietrich Knauth
(RockedBuzz via Reuters) – Bankrupt cryptocurrency exchange FTX said in a report to creditors on Tuesday that about $415 million worth of cryptocurrencies had been stolen due to hacker attacks.
FTX said it has recovered more than $5 billion in cryptocurrencies, cash and liquid securities, but that significant shortages remained both in international cryptocurrency exchanges and in the United States. FTX attributed part of the shortfall to hacks, saying $323 million in cryptocurrencies have been hacked by FTX’s international exchange and $90 million by the US exchange since it filed for bankruptcy on Nov. 11.
Indicted founder Sam Bankman-Fried later disputed aspects of the company’s relationship in a blog post.
Bankman-Fried, who has been accused of stealing billions of dollars from FTX clients to pay off debts incurred by its cryptocurrency-focused hedge fund, Alameda Research, dismissed FTX’s calculations on Tuesday, saying the firm’s lawyers Sullivan & Cromwell had presented an “extremely misleading” picture of the company’s finances.
Bankman-Fried said FTX has more than enough cash to repay U.S. customers, who he says are owed between $181 million and $497 million based on his “best guess.” Bankman-Fried hasn’t had access to FTX records since he stepped down as CEO in November.
A spokesman for Sullivan and Cromwell declined to comment. The company’s attorneys said in a recent court filing that they rejected Bankman-Fried’s efforts to remain embroiled in the company’s bankruptcy proceedings.
Bankman-Fried pleaded not guilty to fraud charges and is expected to face trial in October.
FTX did not provide an estimate of the amount owed to FTX’s US or international customers and did not immediately respond to questions about Bankman-Fried’s blog post.
FTX provided some additional details about its recovery efforts on Tuesday, saying it recovered $1.7 billion in cash, $3.5 billion in liquid cryptocurrency and $300 million in liquid securities.
“We are making progress in our efforts to maximize recoveries and it has taken a Herculean investigative effort by our team to uncover this preliminary information,” Ray said in a statement.
Crypto assets recovered to date include $685 million in Solana, $529 million in FTX’s proprietary FTT token, and $268 million in bitcoin, based on cryptocurrency prices as of Nov. 11, 2022. Solana, which was commended by Bankman -Fried, lost most of its value in 2022.
During FTX’s initial investigation into hacks to its system, it uncovered a November asset seizure by the Securities Commission of the Bahamas, which led to a dispute between FTX’s US-based bankruptcy team and law enforcement officials. regulation of the Bahamas.
The two sides settled their differences in January, and on Tuesday Ray said the Bahamian government held $426 million for creditors.
Bahamian Prime Minister Philip Davis referred to the dispute during an event Tuesday at the Atlantic Council in Washington, saying Ray’s team had “come around” and agreed that the seizure of Bahamian assets “was appropriate and perhaps saved the day for many of the investors in FTX.”
(Reporting by Dietrich Knauth in New York; Juby Babu in Bangalore; and Jasper Ward in Washington; Editing by Noeleen Walder, Amy Stevens, Matthew Lewis and Gerry Doyle)