Beyond this, a further treasure trove of tokens has been discovered — but an attorney representing the company warned these altcoins are illiquid.
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FTX's new management has delivered a glimmer of good news as it untangles the mess left by Sam Bankman-Fried — as $5 billion in assets have now been recovered.
That's substantially more than the $1 billion figure that was put forward by John Ray, the embattled exchange's new CEO, when he appeared before Congress last month.
A bankruptcy court was told that this latest sum is a blend of cash and liquid cryptocurrencies that would be easy to sell.
Beyond this, a further treasure trove of tokens has been discovered — but an attorney representing the company warned these altcoins are illiquid, adding:
"Our holdings are so large relative to the total supply that our positions cannot be sold without substantially affecting the market for the token."
This is a common problem relating to altcoins with a smaller market cap, as significant selloffs would lead to an outsized drop in price.
Wednesday's update doesn't guarantee a happy ending for FTX's customers, who have been out of pocket since withdrawals were frozen before the bankruptcy.
Adam Landis, representing the exchange, admitted that it's difficult to ascertain how much money is missing following the commingling of funds with sister trading firm Alameda Research.
All of this means there's a real risk that FTX customers, and other creditors, may only receive a fraction of the money that they had tied up in the trading platform. Landis added:
"We know what Alameda did with the money. It bought planes, houses, threw parties, made political donations. It made personal loans to its founders. It sponsored the FTX Arena in Miami, a Formula One team, the League of Legends, Coachella and many other businesses, events and personalities."
The attorney stressed that work is still underway to claw back other funds, with a view to ensuring that FTX's customers can be made as whole as possible.
Clock is Ticking
The hearing at the bankruptcy court in Delaware also revealed that a whopping nine million customer accounts in FTX were holding about $20 billion in digital assets — funds that were allegedly used by Alameda Research for big bets and extravagant purchases without their knowledge.
According to CoinDesk, FTX's new management is now under considerable time pressure to piece together the rest of the puzzle — work that's crucial for facilitating a reorganization and projecting how much customers will get back.
While the exchange's new chief financial officer had projected this Everestian task could be concluded by April, the judge has now set a deadline of March 15. Considering that one U.S. politician told John Ray in a congressional hearing that this mess could take years to untangle, that could be a very tall order indeed.
On the bright side, teams in the U.S. and The Bahamas have now agreed to set aside most of their differences in order to cooperate on FTX's bankruptcy — a move that will hopefully put weeks of bitter infighting between both sides behind them.
