Summary:
- Landis Rath & Cobb lawyers stated the recovery claim during a bankruptcy hearing on Wednesday
- The $5 billion in question was reclaimed in “cash, liquid crypto, and liquid investment securities”, per the court hearing.
- FTX bankruptcy CEO John Ray previously tagged the company’s recovery efforts at around $1.2 billion in December 2022.
Attorneys from Landis Rath and Cobb told a judge that FTX recovered some $5 billion as bankruptcy hearings for the defunct crypto exchange continued on Wednesday. According to Landis Rath and Cobb lawyer Adam Landis, the company reclaimed the stated value in cash, liquid cryptocurrencies, and liquid investment securities.
FTX’s legal representatives noted that the latest recovery did not include approximately $425 million in customer crypto seized by Bahamian authorities in late December 2022.
Indeed, Wednesday’s court claim boosted the company’s recovered assets value by a considerable margin. On December 20, 2022, bankruptcy CEO John Ray III said the sunken crypto exchange had secured roughly $1.2 billion in value. Ray noted that loose accounting structures in Sam Bankman-Fried’s crypto empire made it tricky to track down assets.
The latest clawback by the bankruptcy management under Ray could propel the estate’s holdings to over $7 billion, making more funds available for customers, creditors, and investors.
Crypto Twitter Puzzled By Mystery $5 Billion Recovery
Observers on Crypto Twitter were skeptical regarding claims of a massive $5 billion recovery by FTX’s bankruptcy team. Coinbase director Conor Grogan pointed out that on-chain wallets controlled by the defunct exchange held less than $4 billion in value.
Users also enquired whether or not the $5 billion in question included over $400 million in Robinhood shares seized by the Department of Justice.
Crypto proponent Adam Cochran also speculated that Sam Bankman-Fried himself could be involved in the mystery recovery. The user noted that SBF supposedly offered Elon Musk $5 billion in equity to support his Twitter takeover.
FTX Asks Judge To Ignore Celsius Precedent
FTX attorneys filed a motion to redact all creditor information and protect customer privacy.. The request was opposed by media organizations including Bloomberg, the Financial Times, and the New York Times who argued in favor of the precedent set by Celsius.
Notably, Celsius’s bankruptcy proceedings revealed 14,000 pages of user information including account names and transaction histories.
Lawyers representing the fallen crypto exchange suggested sealing customer data for a period of six months. FTX attorneys argued that this time will be sufficient for the court to assess the value of the data and whether it should be made public.