FTX lawyers: Substantial amount of assets are missing
New York, Nov 22 (EFE).- Attorneys for the FTX cryptocurrency platform, which on Tuesday appeared in US bankruptcy court, confirmed that a “substantial” quantity of the firm’s assets are missing or have been stolen.
“A substantial quantity” of assets “have either been stolen or are missing,” said newly appointed FTX lawyer James Bromley during a hearing held in a federal court in Delaware, The New York Times reported.
Last week, the new FTX CEO, John Ray, said in a report that a “substantial” portion of the assets held by FTX could be “lost or stolen.”
In a written presentation to the court, Ray had also noted an almost complete lack of corporate controls at the firm and a lack of trustworthy financial information, questions to which the attorneys now representing the firm returned to in court on Tuesday.
At the hearing, US bankruptcy Judge John Dorsey gave his approval to motions enabling the company to keep operating and paying its workers while Ray and his advisers scour through FTX’s books looking for cash, along with cryptocurrency and other assets the company could sell to at least partially repay its creditors, although he ruled that the names of those creditors could remain secret for now.
“Unfortunately, the FTX debtors were not particularly well run, and that is an understatement,” said Bromley, who is the co-chief of the restructuring practice at the Sullivan & Cromwell law firm, told Judge Dorsey in Wilmington, Delaware.
“We have probably witnessed one of the most abrupt and difficult corporate collapses in the history of corporate America,” Bromley added.
He also told the judge that FTX is a “worldwide organization that was run effectively as (his) personal fiefdom” by its founder, 30-year-old Sam Bankman-Fried.
The attorney also said that FTX had been the target of cyberattacks from the day that it declared bankruptcy earlier this month.
FTX, valued at some $32 billion, consisted of about 130 affiliated firms established by Bankman-Fried, but the dynamic cryptocurrency empire collapsed into bankruptcy within just a few days.
The company could have more than a million creditors around the world. Up to now, FTX has admitted owing more than $3 billion to its 50 main creditors.
The firm’s new managers have begun taking measures under Ray’s guidance to try and locate its clients’ funds and other assets, but they have said that they may need until January to prepare a complete list and balance sheet of the firm’s assets and liabilities, although some of FTX’s commercial divisions seem to still be solvent, according to The Wall Street Journal.
In addition, the company has said that it has located $1.4 billion in cash that seems to belong to FTX, more than double the funds that it had listed in a report presented to the court last week.
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