The firm tasked with locking down the assets of the failed crypto exchange FTX says it has managed to recover and secure $740 million in assets so far, a fraction of the possibly billions of dollars likely missing from the firm’s coffers.
The number was disclosed in court filings by FTX, which hired the crypto custodial company BitGo hours after FTX filed for bankruptcy on November 11, 2022.
The biggest worry for many of FTX’s clients is they’ll never see their money again. FTX failed because its founder and former CEO Sam Bankman-Fried and his deputies used customer assets to make bets in FTX’s closely associated trading firm, Alameda Research. Bankman-Fried was reportedly looking for potentially north of $8 billion from new investors to repair the firm’s balance sheet.
The $740 million figure is from November 16, 2022. BitGo estimates that the amount of recovered and secured assets has likely risen over $1 billion since that date.
The recovered assets are now locked in South Dakota in what is known as “cold storage,” meaning they are cryptocurrencies stored on hard drives disconnected from the internet. It’s essentially the crypto equivalent of a financial fiduciary, offering segregated accounts and other security services to lock down digital assets.