FTX US Lost $90M to Post-Bankruptcy Hack, as SBF Calls Its Bankruptcy Unnecessary
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FTX US Lost $90M to Post-Bankruptcy Hack, as SBF Calls Its Bankruptcy Unnecessary

Created 2mo ago, last updated 2mo ago

FTX revealed that $90 million of the $415 million stolen a day after its bankruptcy filing belonged to the U.S. exchange. Meanwhile, SBF called its reported insolvency "extremely misleading."

FTX US Lost $90M to Post-Bankruptcy Hack, as SBF Calls Its Bankruptcy Unnecessary

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FTX US lost half of its $181 million in digital assets in a post-bankruptcy hack, the new FTX management team has revealed in a bankruptcy court filing.

While warning that all numbers are preliminary as it is still searching through the chaotic and incomplete records left by Sam Bankman-Fried and his executive team, $90 million "was subject to unauthorized third-party transfers post-petition," the FTX debtors team said.
That is part of a large hack that took place on Nov. 12, just a day after the Chapter 11 filing and before the new managers had been able to find and secure its assets. A number of people, including FTX founder Sam Bankman-Fried, have suggested it was an inside job.

While the estimates of the total amount stolen have changed several times, it started out at $477 million. The current estimate puts it at $415 million. But it had not been revealed that a large chunk of that came from FTX US rather than the much larger international exchange, FTX.com, or Alameda Research.

Bankman-Fried has been arrested and several of his top deputies have already pleaded guilty to fraud and conspiracy charges surrounding the alleged theft of $10 billion in FTX customers' funds. This was illegally transferred to Bankman-Fried's private trading firm Alameda Research when it ran into crypto winter financial difficulties, prosecutors have said.
The filing with the federal bankruptcy court in Delaware detailed $5.5 billion in liquid assets found by the new management team. That includes $1.7 billion in cash, $3.5 billion in various cryptocurrencies and $300 million in securities. Those numbers do not include the 56 million shares of trading app Robinhood valued at $456 million that Bankman-Fried bought with a loan from Alameda Research in May.
There are also $4.6 billion in venture investments that will likely yield a far smaller return, the restructuring management warned, and four subsidiaries that are not bankrupt and will be sold — U.S. crypto derivatives exchange LedgerX, clearing broker Embed, FTX EU and FTX JP, which includes the FTX Japan and FTX Singapore exchanges. Beyond that it is looking into billions in potential clawbacks.

SBF Denies FTX US Is Bankrupt

In response, Bankman-Fried promptly doubled down on the claims he made in a Jan. 12 post on a Substack blog claiming that FTX US was actually solvent.
In the latest post, Bankman-Fried called the filing "extremely misleading."

Specifically, he took exception to the line in the press release saying "assets identified as of the Petition Date are substantially less than the aggregate third-party customer balances suggested by the electronic ledger for FTX US."

Bankman-Fried said that the release and the presentation in the filing "failed to include $428 million in FTX US's bank accounts as an asset."

That would put FTX US's assets at $609 million. He also said FTX US customers' balances totaled $497 million the day before a massive run of withdrawals. He said $199 million is probably a more accurate number after that day. Thus, he concludes:

"FTX US had at least $111 million, and likely around $400 million, of excess cash on top of what was required to match customer balances."

He did not touch on the topic of shortfalls at the international exchange, FTX.com.

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