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

Nov 22, 2022, 11:34 PM | Updated: Nov 23, 2022, 3:07 pm
The FTX Arena name is still visible where the Miami Heat basketball team plays Saturday, Nov. 12, 2...

The FTX Arena name is still visible where the Miami Heat basketball team plays Saturday, Nov. 12, 2022, in Miami. Lawyers for FTX disclosed Tuesday that a “substantial amount" of assets have been stolen from the accounts of the collapsed cryptocurrency exchange, diminishing the odds that its millions of investors will get their money back. (AP Photo/Marta Lavandier, File)

(AP Photo/Marta Lavandier, File)

NEW YORK (AP) — The company tasked with locking down the assets of the failed cryptocurrency exchange FTX says it has managed to recover and secure $740 million in assets so far, a fraction of the potentially billions of dollars likely missing from the company’s coffers.

The numbers were disclosed on Wednesday in court filings by FTX, which hired the cryptocurrency custodial company BitGo hours after FTX filed for bankruptcy on Nov. 11.

The biggest worry for many of FTX’s customers is they’ll never see their money again. FTX failed because its founder and former CEO Sam Bankman-Fried and his lieutenants used customer assets to make bets in FTX’s closely related trading firm, Alameda Research. Bankman-Fried was reportedly looking for upwards of $8 billion from new investors to repair the company’s balance sheet.

Bankman-Fried “proved 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 Nov. 16. BitGo estimates that the amount of recovered and secured assets has likely risen above $1 billion since that date.

The assets recovered by BitGo are now locked in South Dakota in what is known as “cold storage,” which means they’re cryptocurrencies stored on hard drives not connected to the internet. BitGo provides what is known as “qualified custodian” services under South Dakota law. It’s basically the crypto equivalent of financial fiduciary, offering segregated accounts and other security services to lock down digital assets.

Several crypto companies have failed this year a s bitcoin and other digital currencies have collapsed in value. FTX failed when it experienced the crypto equivalent of a bank run, and early investigations have found that FTX employees intermingled assets held for customers with assets they were investing.

“Trading, financing, and custody need to be different,” Belshe said.

The assets recovered include not only bitcoin and ethereum, but also a collection of minor cryptocurrencies that vary in popularity and value, such as the shiba inu coin.

California-based BitGo has a history of recovering and securing assets. The company was tasked with securing assets after the cryptocurrency exchange Mt. Gox failed in 2014. It is also the custodian for the assets held by the government of El Salvador as part of that country’s experiment in using bitcoin as legal tender.

FTX is paying Bitgo a $5 million retainer and $100,000 a month for its services.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - Chinese President Xi Jinping waves at an event to introduce new members of the Politburo Sta...
Associated Press

China’s Xi faces public anger over draconian ‘zero COVID’

SHANGHAI (AP) — Barely a month after granting himself new powers as China’s potential leader for life, Xi Jinping is facing a wave of public anger of the kind not seen for decades, sparked by his draconian “zero COVID” program that will soon enter its fourth year. Demonstrators poured into the streets over the weekend […]
1 day ago
British Minister of State for Indo-Pacific Anne-Marie Trevelyan speaks at the National Press Club i...
Associated Press

UK minister says Australian submarines will assure neighbors

CANBERRA, Australia (AP) — Australia’s shift to nuclear-powered submarines will assure its South Pacific neighbors of its commitment to regional security, Britain’s Minister of State for the Indo-Pacific said Monday. Australia will announce in March what type of submarine powered with U.S. nuclear technology it wants to build under a deal with the United States […]
1 day ago
A woman shouts during a protest in Beijing, Sunday, Nov. 27, 2022. Protesters angered by strict ant...
Associated Press

China affirms zero-COVID stance, eases rules after protests

BEIJING (AP) — Authorities eased anti-virus rules in scattered areas but affirmed China’s severe “zero- COVID” strategy Monday after crowds demanded President Xi Jinping resign during protests against controls that confine millions of people to their homes. The government made no comment on the protests or criticism of Xi, the most widespread display of opposition […]
1 day ago
FILE - Ukraine's President Viktor Yushchenko talks with US President George W.Bush, at the NATO Sum...
Associated Press

14 years on, NATO to renew a vow to Ukraine

BUCHAREST (AP) — NATO returns on Tuesday to the scene of one of its most controversial decisions, intent on repeating its vow that Ukraine — now suffering through the 10th month of a war against Russia — will join the world’s biggest military alliance one day. NATO foreign ministers will gather for two days at […]
1 day ago
This photo mad available by Ukrainian doctor Oleh Duda shows the moment when lights at a hospital w...
Associated Press

Surgeons work by flashlight as Ukraine power grid battered

KHERSON, Ukraine (AP) — Dr. Oleh Duda, a cancer surgeon at a hospital in Lviv, Ukraine, was in the middle of a complicated, dangerous surgery when he heard explosions nearby. Moments later, the lights went out. Duda had no choice but to keep working with only a headlamp for light. The lights came back when […]
1 day ago
Sheree Perry of Virginia Beach, center, prays with chaplains at a memorial on Friday, Nov. 25, 2022...
Associated Press

City to hold vigil honoring those killed in Walmart shooting

CHESAPEAKE, Va. (AP) — The city of Chesapeake, Virginia, has scheduled a candlelight vigil for Monday evening that will honor and remember the victims of last week’s mass shooting at a Walmart store. Six employees were killed and six people were wounded by a store supervisor late Tuesday night in the city of about 250,000 […]
1 day ago

Sponsored Articles

SHIBA WA...

Medicare open enrollment is here and SHIBA can help!

The SHIBA program – part of the Office of the Insurance Commissioner – is ready to help with your Medicare open enrollment decisions.
Lake Washington Windows...

Choosing Best Windows for Your Home

Lake Washington Windows and Doors is a local window dealer offering the exclusive Leak Armor installation.
Anacortes Christmas Tree...

Come one, come all! Food, Drink, and Coastal Christmas – Anacortes has it all!

Come celebrate Anacortes’ 11th annual Bier on the Pier! Bier on the Pier takes place on October 7th and 8th and features local ciders, food trucks and live music - not to mention the beautiful views of the Guemes Channel and backdrop of downtown Anacortes.
Swedish Cyberknife Treatment...

The revolutionary treatment of Swedish CyberKnife provides better quality of life for majority of patients

There are a wide variety of treatments options available for men with prostate cancer. One of the most technologically advanced treatment options in the Pacific Northwest is Stereotactic Body Radiation Therapy using the CyberKnife platform at Swedish Medical Center.
Work at Zum Services...

Seattle Public Schools announces three-year contract with Zum

Seattle Public Schools just announced a three-year contract with a brand-new company to the Pacific Northwest to assist with their student transportation: Zum.
Swedish Cyberknife 900x506...

June is Men’s Health Month: Here’s Why It’s Important To Speak About Your Health

According to the Centers for Disease Control and Prevention, men in the United States, on average, die five years earlier than women.
$740M in crypto assets recovered in FTX bankruptcy so far