Home Business $740M in crypto assets recovered in FTX bankruptcy so far

$740M in crypto assets recovered in FTX bankruptcy so far

by News Desk
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Ken Sweet, Associated Press

Published Wednesday, November 23, 2022 at 5:33 PM EST

Last Updated Wednesday, November 23, 2022 at 5:59 PM EST

NEW YORK (AP) – The company tasked with locking down the assets of failed cryptocurrency exchange FTX says it has so far recovered and secured $740 million in assets.

The figure was revealed Wednesday in a court filing by FTX, which hired cryptocurrency management firm BitGo, hours later. FTX filed for bankruptcy on November 11th.

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 Alameda Research, a trading firm closely related to FTX. is. Bankman-Fried reportedly sought more than $8 billion from new investors to fix the company’s balance sheet.

Bankman-Fried has proven that there is no such thing as a ‘safe’ conflict of interest,” BitGo CEO Mike Belshe said in an email.

The $740 million figure is from November 16th. BitGo estimates that since that date, the amount of recovered and protected assets he has likely surpassed $1 billion.

Assets recovered by BitGo are currently locked in so-called “cold storage” in South Dakota. This means that it is cryptocurrency stored on a hard drive that is not connected to the internet. BitGo provides a so-called “qualified custodian” service under South Dakota law. It is essentially the crypto equivalent of a financial trustee, providing segregated accounts and other security services to lock down digital assets.

Several crypto companies failed this year as the value of Bitcoin and other digital currencies collapsed. FTX failed when it experienced the crypto equivalent of a bank crackdown, and early research found a mix of assets FTX employees held for customers and assets they invested in. It turned out that

“Trading, funding and custody should be different,” said Belshe.

The recovered assets include not only Bitcoin and Ethereum, but also a collection of minor cryptocurrencies with varying popularity and value, such as Shiba Inu Coin.

Based in California, BitGo has a history of asset recovery and protection. The company was tasked with securing assets following the collapse of cryptocurrency exchange Mt. Gox in 2014. It is also the custodian of assets held by the government of El Salvador as part of its attempt to use Bitcoin as legal tender.

FTX pays Bitgo $5 million in fees and $100,000 per month for the service.

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