FTX Estate Selling Crypto, Hoarding Cash To Pay Out Customer Claims: Report
The bankruptcy estate of former crypto exchange FTX is reportedly selling off billions of dollars worth of crypto assets and hoarding cash to pay out customers it owes money to.
According to a new report by Bloomberg, FTX has begun selling digital assets as a means of repaying customers who had their accounts frozen during the high-profile downfall of the now-defunct exchange in late 2022.
The report finds that the four largest firms affiliated with FTX, including Alameda Research, were able to raise the estate’s cash reserves to about $4.4 billion by the end of 2023 from around $2.3 billion in late October. The report also notes that FTX’s overall cash supply is likely an even higher figure if the rest of the firm’s affiliates were included.
Since its multi-billion-dollar collapse, advisers for the crypto exchange have been tracking down assets, striking deals with smaller customers and suing former associates of Sam Bankman-Fried – the firm’s disgraced founder – as well as taking other crypto firms to court for allegedly withdrawing cash before FTX could file for bankruptcy, according to the report.
Last week, FTX’s trading arm Alameda Research dropped a lawsuit against Grayscale that claimed the crypto asset manager withdrew $1.3 billion in excessive management fees.
Despite making moves to repay customers, FTX says it doesn’t expect them to be fully repaid and that users of FTX.com would bear the brunt of the losses.
Furthermore, customers are challenging the company’s proposal that would peg the value of their digital assets to what it was at the time FTX collapsed, potentially missing out on 2023’s gains.
FTX customer claims are currently worth $0.73 on the dollar, according to investment firm and bankruptcy claims broker Cherokee Acquisition, up from $0.38 on the dollar in October.
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The post FTX Estate Selling Crypto, Hoarding Cash To Pay Out Customer Claims: Report appeared first on The Daily Hodl.
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Author: Mehron Rokhy
