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FTX collapse: lawyer says ‘substantial’ assets stolen

by News Desk
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Ken Sweet, Canadian Press

Published Tuesday, November 22, 2022 at 2:33 PM EST

Last updated Tuesday, November 22, 2022 at 2:33 PM EST

NEW YORK (AP) – FTX lawyers revealed on Tuesday that a “substantial amount” of assets had been stolen from bankrupt crypto exchange accounts, reducing the chances of millions of investors getting their money back. I made it

Such approval was made when FTX first appeared in court since the company filed for bankruptcy protection on November 11. Such hearings are usually held a few days after the filing, but the hearing was postponed this time because of FTX’s sudden collapse and management’s lack of record keeping.

“This company was run by individuals who were inexperienced, unsophisticated, and potentially personally at risk,” FTX creditors said to lead the company into bankruptcy. said James Bromley, a partner at the law firm he hired, Sullivan & Cromwell. “This is he one of the most sudden and difficult corporate collapses in American corporate history.”

Shorting billions of dollars, FTX has sought bankruptcy protection after the crypto exchange suffered the equivalent of a bank run. To date, he has more than 100,000 claims, according to the company, and that number could exceed 1 million once the bankruptcy case is resolved.

But getting all those funds back is becoming more and more difficult. After the FTX demise, hundreds of millions of dollars of cryptocurrency was moved from his FTX account to other cryptocurrency wallets. There have been some reports that some of these funds may have been seized by the Bahamas government, where FTX is headquartered, as part of its own investigation, but most of these cryptocurrencies are being sold in a variety of different I am moving through my wallet. It seems like the crypto equivalent of money laundering.

In court, FTX attorneys admitted that a “significant amount” of assets had been stolen from FTX accounts.

“We understand the concern and anger and are working day and night to bring order to chaos,” Bromley said.

FTX’s bankruptcy has generated a lot of interest, not just from cryptocurrency investors. The company also had major sports sponsorships, including deals with Formula One racing and Major League Baseball. FTX had the naming rights to Miami’s sports arena. and some celebrities Either you invested in FTX or signed a sponsorship deal with the company.

Nearly 700 people attended US Bankruptcy Judge John Dorsey’s conference room on Tuesday, and the hearing was also streamed on YouTube.

Judge Dorsey temporarily granted FTX one controversial order to redact names and addresses on FTX’s customer list. Normally, bankruptcy law makes all claims against a bankrupt company public. However, FTX lawyers argued that protecting the identities of FTX customers was necessary, at least temporarily, to avoid the possibility of future theft of FTX accounts.

Dorsey expects to allow temporary redaction of FTX customer names and information and to release those names once the case is closed.

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