FTX: $740 million collected
Associated Press- November 24, 2022 / 6:22 AM | | Story: 398017
Photo: Canadian Press
The company tasked with locking down the assets of the failed cryptocurrency exchange FTX said it has so far recovered and secured $740 million in assets.
The figure was revealed Wednesday in a court filing by cryptocurrency management firm BitGo, which FTX hired hours after the company filed for bankruptcy on Nov. 11.
The biggest concern for many FTX customers is never seeing their money again. FTX failed because its founder and former CEO, Sam Bankman-Fried, and his lieutenants used client assets to place bets on Bankman-Fried’s trading firm, Alameda Research. Bankman-Fried reportedly said he was seeking more than $8 billion from new investors to fix the company’s balance sheet.
The $740 million figure is from November 16, and additional assets have been steadily recovered since then.
Assets recovered by BitGo are now locked in what is known as “cold storage” in South Dakota. In other words, they are cryptocurrencies stored on hard drives that are not connected to the internet. BitGo provides a so-called “qualified custodian” service under South Dakotan law. It is essentially the crypto equivalent of a financial trustee, providing segregated accounts and other security services to lock down digital assets.
The recovered assets include not only Bitcoin and Ethereum, but also a collection of different popular minor cryptocurrencies such as Shiba Inu Coin.
Based in California, BitGo has a history of asset recovery and protection. They were tasked with securing assets following the collapse of cryptocurrency exchange Mt. Gox in 2014. The company is also the custodian of assets held by the government of El Salvador.