FTX, the failed cryptocurrency exchange, owes its customers $8.7 billion after misusing and commingling their deposits since the start of operating the exchange.
FTX Owed Clients More Than $8 Billion and Lacked the Funds as Early as August 2022
FTX, the failed cryptocurrency exchange, owes its customers $8.7 billion after misusing and commingling their deposits since the start of operating the exchange, according to a new report from the FTX bankruptcy team.
The report alleges that senior executives knew as early as August 2022 and that $6.4 billion of the money owed “in the form of fiat currency and stablecoin that had been misappropriated”. About $7 billion in liquid assets have been recovered so far, with additional recoveries anticipated.
CEO John J. Ray III, who is trying to recover money for creditors, said:
“From the inception of the FTX.com exchange, the FTX Group commingled customer deposits and corporate funds, and misused them with abandon at the direction and by the design of previous senior executives.”
Ray has been working to settle the exchange's affairs ever since it collapsed in November, as the company is currently going through bankruptcy proceedings in Delaware.
Sam Bankman-Fried, the company's founder and former CEO, will be tried in New York in October on a number of criminal allegations. According to the investigation, the company's senior management, including Caroline Ellison, the former CEO of Alameda Research, were aware that the company owed clients more than $8 billion and lacked the funds as early as August 2022.
