FTX Debtors Provide Additional Information to Customers and Other Stakeholders

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Jan 17, 2023, 14:40 ET

Post Presentation With Details on Digital Assets and Other Property of the FTX Debtors

Identified Approximately $5.5 Billion of Liquid Assets to Date, Confirmed Material Shortfalls at Both International and US Exchanges

WILMINGTON, Del., Jan. 17, 2023 /PRNewswire/ -- FTX Trading Ltd. and its affiliated debtors (together, the "FTX Debtors") today announced that their top level management and advisors met with the members of and advisors to the Official Committee of Unsecured Creditors (the "UCC") in their chapter 11 cases this morning as part of their ongoing efforts to share preliminary information obtained since the commencement of the chapter 11 cases on November 11, 2022 (the "Petition Date"), and to provide an update regarding asset recovery efforts to date.

A presentation was used in the meeting with the UCC, which the FTX Debtors will file on the docket in the chapter 11 cases today. The presentation highlights that a total of approximately $5.5 billion of liquid assets have been identified, comprised of $1.7 billion of cash, $3.5 billion of crypto assets and $0.3 billion of securities. The presentation also provides details with respect to the assets and property of the FTX Debtors, including cash, digital assets, investment securities, real estate, investments, businesses and other property. All stakeholders are invited to review the presentation, which the UCC is doing as well.

The FTX Debtors also confirmed that, based on current estimates of the amount of digital assets associated with the FTX.com and FTX US exchanges as of the Petition Date, there is a substantial shortfall of digital assets at both exchanges.

With respect to FTX.com, the FTX Debtors have identified approximately $1.6 billion of digital assets associated with FTX.com as of the Petition Date, $323 million of which was subject to unauthorized third-party transfers post-petition, $426 million of which was transferred to cold storage under the control of The Securities Commission of The Bahamas, $742 million of which is in cold storage under the control of the FTX Debtors, and $121 million of which is pending transfer to cold storage under the control of the FTX Debtors. The assets identified as of the Petition Date are substantially less than the aggregate third-party customer balances suggested by the electronic ledger for FTX.com.

With respect to the FTX US exchange, the FTX Debtors have identified approximately $181 million of digital assets associated with FTX US as of the Petition Date, $90 million of which was subject to unauthorized third-party transfers post-petition, $88 million of which is in cold storage under the control of the FTX Debtors, and $3 million of which is pending transfer to cold storage under the control of the FTX Debtors. The assets identified as of the Petition Date are substantially less than the aggregate third-party customer balances suggested by the electronic ledger for FTX US.

All dollar values noted herein were determined by the FTX Debtors using preliminary pricing information from the FTX order book at the Petition Date. The FTX Debtors continue to attempt to secure assets that may be associated with the exchanges and to trace digital assets back to the exchanges wherever possible.

"We are making important progress in our efforts to maximize recoveries, and it has taken a Herculean investigative effort from our team to uncover this preliminary information," said John J. Ray III, the Chief Executive Officer and Chief Restructuring Officer of the FTX Debtors. "We ask our stakeholders to understand that this information is still preliminary and subject to change. We will provide additional information as soon as we are able to do so."

More information, including the presentation shared during this meeting, can be found on the docket of the chapter 11 cases and posted on the quick links section of the FTX Debtors Kroll site at https://cases.ra.kroll.com/FTX/.

All information in the presentation and referenced above is preliminary and subject to material change.

Advisors

The FTX Debtors are represented by Sullivan & Cromwell LLP as legal counsel and are assisted by Alvarez & Marsal North America, LLC as financial advisor, Perella Weinberg Partners LP as investment banker, Quinn Emanuel Urquhart & Sullivan, LLP as special counsel and Landis Rath & Cobb LLP as Delaware counsel. The UCC is represented by Paul Hastings LLP as legal counsel, FTI Consulting as financial advisor, Jefferies LLC as investment banker and Young Conaway Stargatt & Taylor LLP as Delaware counsel.

SOURCE FTX