It has been more challenging for the new administration to resuscitate the defunct cryptocurrency exchange due to improper record-keeping.
FTX executives are currently attempting to recoup hundreds of millions of dollars in cash from hundreds of bank accounts, its creditors were informed on Tuesday in an effort to salvage the situation of the defunct cryptocurrency exchange
The company’s new management, which took control when FTX founder Sam Bankman-Fried quit on Nov. 11, claimed to have identified assets worth more than $1 billion at a procedural hearing on Tuesday.
The exchange has yet to consolidate the approximately $720 million in cash assets that the company located in U.S. financial institutions that are permitted to hold funds by the U.S. Department of Justice. Institutions in the US already have another amount of close to $500 million.
Mary Cilia, the new chief financial officer of FTX, stated under oath during a portion of the bankruptcy proceedings, “We are reaching out to all of those banks and changing the signatories on the accounts so that we can get access to the accounts and move the cash as much as we can to authorized depository institutions.”
According to Cilia, approximately $130 million in cash is stuck in Japan, where national laws have essentially ring-fenced funds for domestic clients. She added that the majority of the remaining $423 million at unregistered U.S. institutions are at a single broker, though she declined to name the broker, and that an additional $6 million is being maintained for administrative costs including salaries. According to Cilia, $485 million is already in a licensed deposit facility.
Steve Coverick, a senior director at FTX’s financial advisors Alvarez & Marsal, stated at the hearing that there are “ongoing efforts” to locate the company’s foreign cryptocurrency holdings and move them to cold wallets utilizing custodial companies like Bitgo.
The Chapter 11 bankruptcy hearings were expected to wrap up the exchange, but they have become more difficult due to Bankman-Fried’s allegedly lax record-keeping and governance. The company’s new management was required to go over customer terms and conditions that were kept in several places, including Google Drive and Slack according to Coverick.
The company currently expects it will be able to file the declaration of assets and financial position that is necessary under American bankruptcy law in April. The company is still figuring out how many employees it has worldwide—Cilia put the number at 220—and how much money was taken out prior to the bankruptcy.