The bankruptcy estate of the defunct crypto exchange FTX is reportedly liquidating billions in crypto assets, amassing cash reserves to repay customers affected by the exchange's downfall in late 2022.
Cash Reserves Reach $4.4 Billion
FTX has initiated the sale of digital assets to settle obligations to customers whose accounts were frozen during the exchange's demise. A Bloomberg report reveals that the four major firms linked to FTX, including Alameda Research, raised the estate's cash reserves to approximately $4.4 billion by the end of 2023, up from $2.3 billion in late October. The overall cash supply of FTX is likely higher when accounting for other affiliates.
Tracking Assets and Legal Actions
Advisers for FTX have been actively pursuing assets since the exchange's multi-billion-dollar collapse. Legal actions include reaching settlements with smaller customers, suing associates of the disgraced founder Sam Bankman-Fried, and pursuing other crypto firms accused of withdrawing cash before FTX declared bankruptcy.
Withdrawal Lawsuit Withdrawn
Last week, FTX's trading arm, Alameda Research, dropped a lawsuit against Grayscale, alleging the withdrawal of $1.3 billion in excessive management fees.
Customers Challenge Repayment Proposal
FTX acknowledges it doesn't anticipate full customer repayment, with FTX.com users bearing the majority of losses. Customers contest the company's proposal to peg the value of their digital assets to the time of FTX's collapse, potentially missing out on gains in 2023.
Current Value of Claims
As of now, FTX customer claims stand at $0.73 on the dollar, according to Cherokee Acquisition, an investment firm and bankruptcy claims broker. This marks an increase from $0.38 on the dollar in October, indicating a complex path to recovery for affected users.
FTX's Complex Journey Amid Legal Battles
In conclusion, FTX's efforts to settle debts through asset sales unveil the complex aftermath of its collapse. Legal battles, evolving cash reserves, and customer disputes underscore the challenges faced by FTX as it navigates the intricate landscape of crypto exchange bankruptcy.
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