FTX owed customers $8.7B.
A new report released by the FTX team states that the failed exchange owes its customers $8.7 billion due to commingling and misusing their deposits. The report filed on Monday revealed that $6.4 billion of the money owed was in the form of fiat currency and stablecoin that had been misappropriated. So far, about $7 billion in liquid assets have been recovered, and the team expects to recover more. The CEO of the FTX Group, John J. Ray III, who is trying to recover money for creditors, said that the company’s customer-focused image was a mirage and that the previous senior executives commingled customer deposits and corporate funds, and misused them with abandon. The report also reveals that company management and at least one senior lawyer knowingly misused customer money, lied to banks and auditors, executed false documents, and moved the FTX Group from jurisdiction to jurisdiction to avoid detection of their wrongdoing. This is the second report filed by Ray after an initial examination in April that detailed improper activity under founder and former CEO Sam Bankman-Fried’s watch. Bankman-Fried is facing criminal charges set for an October trial in New York. The company is now undergoing bankruptcy proceedings, and Ray has been trying to settle the exchange’s affairs since its November collapse. There have been hints that its operations could be restarted as FTX 2.0. Read More: Sam Bankman-Fried Can’t Subpoena Law Firm Fenwick & West for Documents, U.S. Judge Rules. Edited by Stephen Alpher.
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