4 ms·

FTX Discovers $7.3B in Assets

31 points by crhulls 4y ago

spaceman_2020 4y ago
Unless that $7.3B is in cold hard cash, t-bills, or even USDC, it’s not actually worth $7.3B.
Hamuko 4y ago
>While many are celebrating the news as a testament to the resilience of blockchain technology and its ability to track and recover lost funds, others remain skeptical and express concerns about the long-term viability of FTX. What long-term viability?
foolfoolz 4y ago
did they force bankman-fried to give up a key?
- awb 4y ago
  > The road to recovery for FTX began when the company enlisted the help of a team of forensic accountants, legal experts, and blockchain analysts to track down the lost funds. Their diligent efforts led to the identification and recovery of the missing assets, which had been scattered across various wallets and storage facilities.
jlund-molfese 4y ago
Site won’t load for me, alternate coverage from Reuters: https://archive.is/vwnMb https://archive.is/vwnMb
- rvz 4y ago
  Site loads fine on Chrome, I don't use Firefox.
remarkEon 4y ago
This article offers zero details on what exactly these assets are and where they are at. Why should I believe any of this? >With the recovery of $7.3 billion, FTX's journey to redemption has begun. The saga serves as a cautionary tale for the cryptocurrency world, emphasizing the importance of robust security measures and due diligence to protect both investors and the broader digital asset landscape. This sounds like some kind of PR campaign. For an article that mentions "the resilience of blockchain technology and its ability to track and recover lost funds" it's quite ironic that it's also completely devoid of details. One would think that, after this whole obnoxious episode, FTX would want to prove that these $7.3B in "assets" actually exist. Edit: Just realized this is from that NFT pump and dump site that Horowitz invested in.
- klohto 4y ago
  Because John J. Ray is the CEO who has been tasked with one thing and one thing only.
- Dr_Birdbrain 4y ago
  I liked the way Matt Levine put it: if you’re the sort of company that sometimes randomly finds large amounts of assets you had lost track of, you should be worried you might later find large amounts of liabilities you had lost track of.
- Animats 4y ago
  > This article offers zero details on what exactly these assets are and where they are at. Yes. There's a bit more detail in a court filing here.[1] It's a shiny PowerPoint type presentation with little supporting data. In their latest court filing, FTX only claimed to have $6.2 billion in assets recovered. They had $5.4 billion back in January. The additional money is $0.6 billion from settlements with some parties involved with FTX, and $0.3 billion in cash from somewhere. The remaining $0.9 billion is the crypto assets going up. There was a court hearing today, which is probably where the news story originated. No transcript yet. There still is an "FTX", and the new management is proceeding as if they expect to come out of this with a viable company. This is a chapter 11 reorganization, not a straight liquidation. At least for now. Meanwhile, Bankman-Fried is trying to get the court to release funds to cover the premiums on the officers and directors insurance policy which might pay his legal bills.[2] [1] https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=MTQ5MTQ5Mw==&id2=-1 https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=... [2] https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=MTQ3NjA3NQ==&id2=-1 https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=...
dd36 4y ago
Bitcoin prices doubled?
ravivyas 4y ago
> The road to recovery for FTX began when the company enlisted the help of a team of forensic accountants, legal experts, and blockchain analysts to track down the lost funds. This pretty much encompasses why crypto currencies wont work. Most folks cant afford forensic accountants, legal experts.
- calderknight 4y ago
  Cryptocurrencies do work. Maybe you can connect what's happened here to some specific shortcoming of cryptocurrencies - but it's not clear to me that anybody would need a forensic accountant just by nature of cryptocurrency.
  - remarkEon 4y ago
    I have a bunch of Crypto in a hardware wallet. Properly maintaining your coins is absolutely not something average people can do. I'm not trying to pat myself on the back here, I'm just trying to point out that doing this right isn't easy. "Cryptocurrencies do work" is true for some definition of "true" that doesn't include normal, largely non-technical people.
    - olalonde 4y ago
      I know I probably have a minority point of view, but I don't see Bitcoin as primarily competing with payment systems (e.g. credit cards). I see it as primarily competing with currency. One could envision a credit card denominated in BTC that offers transaction reversibility and dispute resolution features. Additionally, for those who may be uncertain about their ability to securely manage their own private keys, a BTC-denominated "bank account" could be a viable solution.
      - remarkEon 4y ago
        I'm having trouble following your argument (disclaimer: I understand the philosophical arguments underlying BTC and crypto in general, some technical details of how to manage it, little of the math). You say that you don't see it competing with payment systems but as a currency, but isn't the benefit BTC is supposed to offer the infrastructure itself? How is that not a "payment system", in the abstract sense? For example: >One could envision a credit card denominated in BTC that offers transaction reversibility and dispute resolution features. This is a payment system, right?
malux85 4y ago
I'm curious what form those assets take, hopefully the market can support their liquidation. i.e. it's not 7.3B in n00tn00t tokens, where there's no market depth and they are therefore useless ... Probably not if they are users funds, I hope everyone who was wronged gets their $ back.
- ackbar03 4y ago
  Oh sht, better cash out my n00tn00ts before these guys
fwipsy 4y ago
Does anyone else find the phrasing of this article confusing? It seems disingenuous to state "FTX discovers $7.3b in assets" when most of those assets were never lost. As I understand it, they've discovered an additional $0.8b; $7.3b is the total discovered so far. They're still insolvent.
- antonvs 4y ago
  > As I understand it, they've discovered an additional $0.8b That’s right, and that’s since January. Plus, that’s at least partly (mostly?) due to crypto prices, according to the Reuters report[1]: > FTX has benefited from a recent rise in crypto prices, Dietderich said. ... which is to the disadvantage of the people who held crypto at FTX, because at best they’ll apparently be partially compensated based on prices from November. [1] https://www.reuters.com/technology/bankrupt-crypto-exchange-ftx-has-recovered-73-bln-assets-attorney-2023-04-12/ https://www.reuters.com/technology/bankrupt-crypto-exchange-...
bruce511 4y ago
Let her who has not mislaid 7 billion in assets cast the first stone. (I'm sure I have that thumb-drive around here somewhere.) I mean, yay, this is great news for depositors, but, um, assuming no malicious intent, this is perhaps not a good look for a financial company. I'm not sure more regulations will help, but it may encourage depositors to be more diligent about who they store their money with.
- alexriddle 4y ago
  Reading the latest update from the bankruptcy, regulation and enforcement definitely would have helped - I suspect any appropriate auditor conducting a thorough audit would have very quickly realised that the business lacked any controls at all on expenditure (amongst many other issues). Instead, their auditors claim they stand by their work as they weren't asked to audit any internal controls. For a company with billions in customer deposits, that should never have happened.
  - Animats 4y ago
    > regulation and enforcement definitely would have helped As it did in Japan, where the customers already got their money back.
olalonde 4y ago
The growth in the recovered sum can likely be attributed to the recent upswing in cryptocurrency markets. I hope that this does not provide an undue advantage to SBF in his legal defense (e.g. "look FTX is solvent!").
- kevin_thibedeau 4y ago
  Shkreli made back his losses. Still did time.
- hoffs 4y ago
  Fraud is fraud
unboxingelf 4y ago
“There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can't get fooled again.”
- readthenotes1 4y ago
  The Who via George W. Bush
nitwit005 4y ago
Must be tempting for the forensic accountants to pocket some of the lost funds. Evidently FTX won't notice a missing billion here and there.
j_crick 4y ago
I wish I could wake up one day and, too, simply discover a couple of $B in assets. As if I forgot where I put them and then my memory miraculously came back. <sips coffee>
victor9000 4y ago
"complete failure of controls". Most traditional assets would call this criminal negligence, no?
rkagerer 3y ago
It's weird they say "discovered". I'm sure somebody knew the assets were there. I feel it speaks to the Trustee's lack of diligence that it took them this long, and wonder what else they're missing. They ought to be getting disclosures under oath from everyone involved.

31 points by crhulls 4y ago

spaceman_2020 4y ago

Unless that $7.3B is in cold hard cash, t-bills, or even USDC, it’s not actually worth $7.3B.

>While many are celebrating the news as a testament to the resilience of blockchain technology and its ability to track and recover lost funds, others remain skeptical and express concerns about the long-term viability of FTX. What long-term viability?

foolfoolz 4y ago

did they force bankman-fried to give up a key?

awb 4y ago
> The road to recovery for FTX began when the company enlisted the help of a team of forensic accountants, legal experts, and blockchain analysts to track down the lost funds. Their diligent efforts led to the identification and recovery of the missing assets, which had been scattered across various wallets and storage facilities.

jlund-molfese 4y ago

Site won’t load for me, alternate coverage from Reuters: https://archive.is/vwnMb https://archive.is/vwnMb

rvz 4y ago
Site loads fine on Chrome, I don't use Firefox.

remarkEon 4y ago

This article offers zero details on what exactly these assets are and where they are at. Why should I believe any of this? >With the recovery of $7.3 billion, FTX's journey to redemption has begun. The saga serves as a cautionary tale for the cryptocurrency world, emphasizing the importance of robust security measures and due diligence to protect both investors and the broader digital asset landscape. This sounds like some kind of PR campaign. For an article that mentions "the resilience of blockchain technology and its ability to track and recover lost funds" it's quite ironic that it's also completely devoid of details. One would think that, after this whole obnoxious episode, FTX would want to prove that these $7.3B in "assets" actually exist. Edit: Just realized this is from that NFT pump and dump site that Horowitz invested in.

klohto 4y ago
Because John J. Ray is the CEO who has been tasked with one thing and one thing only.
Dr_Birdbrain 4y ago
I liked the way Matt Levine put it: if you’re the sort of company that sometimes randomly finds large amounts of assets you had lost track of, you should be worried you might later find large amounts of liabilities you had lost track of.
Animats 4y ago
> This article offers zero details on what exactly these assets are and where they are at. Yes. There's a bit more detail in a court filing here.[1] It's a shiny PowerPoint type presentation with little supporting data. In their latest court filing, FTX only claimed to have $6.2 billion in assets recovered. They had $5.4 billion back in January. The additional money is $0.6 billion from settlements with some parties involved with FTX, and $0.3 billion in cash from somewhere. The remaining $0.9 billion is the crypto assets going up. There was a court hearing today, which is probably where the news story originated. No transcript yet. There still is an "FTX", and the new management is proceeding as if they expect to come out of this with a viable company. This is a chapter 11 reorganization, not a straight liquidation. At least for now. Meanwhile, Bankman-Fried is trying to get the court to release funds to cover the premiums on the officers and directors insurance policy which might pay his legal bills.[2] [1] https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=MTQ5MTQ5Mw==&id2=-1 https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=... [2] https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=MTQ3NjA3NQ==&id2=-1 https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=...

dd36 4y ago

Bitcoin prices doubled?

ravivyas 4y ago

> The road to recovery for FTX began when the company enlisted the help of a team of forensic accountants, legal experts, and blockchain analysts to track down the lost funds. This pretty much encompasses why crypto currencies wont work. Most folks cant afford forensic accountants, legal experts.

calderknight 4y ago
Cryptocurrencies do work. Maybe you can connect what's happened here to some specific shortcoming of cryptocurrencies - but it's not clear to me that anybody would need a forensic accountant just by nature of cryptocurrency.
- remarkEon 4y ago
  I have a bunch of Crypto in a hardware wallet. Properly maintaining your coins is absolutely not something average people can do. I'm not trying to pat myself on the back here, I'm just trying to point out that doing this right isn't easy. "Cryptocurrencies do work" is true for some definition of "true" that doesn't include normal, largely non-technical people.
  - olalonde 4y ago
    I know I probably have a minority point of view, but I don't see Bitcoin as primarily competing with payment systems (e.g. credit cards). I see it as primarily competing with currency. One could envision a credit card denominated in BTC that offers transaction reversibility and dispute resolution features. Additionally, for those who may be uncertain about their ability to securely manage their own private keys, a BTC-denominated "bank account" could be a viable solution.
    - remarkEon 4y ago
      I'm having trouble following your argument (disclaimer: I understand the philosophical arguments underlying BTC and crypto in general, some technical details of how to manage it, little of the math). You say that you don't see it competing with payment systems but as a currency, but isn't the benefit BTC is supposed to offer the infrastructure itself? How is that not a "payment system", in the abstract sense? For example: >One could envision a credit card denominated in BTC that offers transaction reversibility and dispute resolution features. This is a payment system, right?

malux85 4y ago

I'm curious what form those assets take, hopefully the market can support their liquidation. i.e. it's not 7.3B in n00tn00t tokens, where there's no market depth and they are therefore useless ... Probably not if they are users funds, I hope everyone who was wronged gets their $ back.

ackbar03 4y ago
Oh sht, better cash out my n00tn00ts before these guys

fwipsy 4y ago

Does anyone else find the phrasing of this article confusing? It seems disingenuous to state "FTX discovers $7.3b in assets" when most of those assets were never lost. As I understand it, they've discovered an additional $0.8b; $7.3b is the total discovered so far. They're still insolvent.

antonvs 4y ago
> As I understand it, they've discovered an additional $0.8b That’s right, and that’s since January. Plus, that’s at least partly (mostly?) due to crypto prices, according to the Reuters report[1]: > FTX has benefited from a recent rise in crypto prices, Dietderich said. ... which is to the disadvantage of the people who held crypto at FTX, because at best they’ll apparently be partially compensated based on prices from November. [1] https://www.reuters.com/technology/bankrupt-crypto-exchange-ftx-has-recovered-73-bln-assets-attorney-2023-04-12/ https://www.reuters.com/technology/bankrupt-crypto-exchange-...

bruce511 4y ago

Let her who has not mislaid 7 billion in assets cast the first stone. (I'm sure I have that thumb-drive around here somewhere.) I mean, yay, this is great news for depositors, but, um, assuming no malicious intent, this is perhaps not a good look for a financial company. I'm not sure more regulations will help, but it may encourage depositors to be more diligent about who they store their money with.

alexriddle 4y ago
Reading the latest update from the bankruptcy, regulation and enforcement definitely would have helped - I suspect any appropriate auditor conducting a thorough audit would have very quickly realised that the business lacked any controls at all on expenditure (amongst many other issues). Instead, their auditors claim they stand by their work as they weren't asked to audit any internal controls. For a company with billions in customer deposits, that should never have happened.
- Animats 4y ago
  > regulation and enforcement definitely would have helped As it did in Japan, where the customers already got their money back.

olalonde 4y ago

The growth in the recovered sum can likely be attributed to the recent upswing in cryptocurrency markets. I hope that this does not provide an undue advantage to SBF in his legal defense (e.g. "look FTX is solvent!").

kevin_thibedeau 4y ago
Shkreli made back his losses. Still did time.
hoffs 4y ago
Fraud is fraud

unboxingelf 4y ago

“There's an old saying in Tennessee — I know it's in Texas, probably in Tennessee — that says, fool me once, shame on — shame on you. Fool me — you can't get fooled again.”

readthenotes1 4y ago
The Who via George W. Bush

nitwit005 4y ago

Must be tempting for the forensic accountants to pocket some of the lost funds. Evidently FTX won't notice a missing billion here and there.

j_crick 4y ago

I wish I could wake up one day and, too, simply discover a couple of $B in assets. As if I forgot where I put them and then my memory miraculously came back. <sips coffee>

victor9000 4y ago

"complete failure of controls". Most traditional assets would call this criminal negligence, no?

rkagerer 3y ago

It's weird they say "discovered". I'm sure somebody knew the assets were there. I feel it speaks to the Trustee's lack of diligence that it took them this long, and wonder what else they're missing. They ought to be getting disclosures under oath from everyone involved.