Wall Street executives representing creditors in the Sam Bankman-Fried-FTX scandal are growing optimistic about their ability to recover a large sum of money that disappeared in the chaotic crypto exchange implosion. , learned The Post.
However, the process could take up to two years, leaving nearly a million FTX customers in limbo and without their money for the foreseeable future, according to people with direct knowledge of the matter.
New FTX CEO John Ray could recover up to half or two-thirds of the estimated $8 billion lost when Bankman-Fried allegedly began stealing crypto wallets held by as many as a million customers, according to These persons.
The boost of optimism for Ray making a decent recovery from creditors comes as he filed court documents showing he had found around $5 billion in liquid assets.
However, valuing many of these assets could be difficult, especially when it comes to investments in illiquid cryptocurrencies or volatile venture capital. This could mean less money distributed to creditors.
Although there has been a flight to quality in the industry which has driven Bitcoin prices higher, other cryptos have been trading significantly lower since the FTX crash as investors fear the regulations and fear that these coins have no intrinsic value.
Check out the latest from The Post on the Sam Bankman-Fried FTX scandal
“We don’t know if Ray will value the money coming back to people based on what their crypto was worth then or what it’s worth now,” said an attorney involved in the process.
Ray did not return calls for comment.
Bankman-Fried was charged with securities fraud. Prosecutors allege he stole money from FTX client wallets to pay for lost trades in his affiliated hedge fund Alameda Research to fund his lavish lifestyle and make political contributions designed to influence the government oversight of the crypto industry.
FTX’s dramatic collapse in November and bankruptcy is still disrupting the trillion-dollar cryptocurrency market. Bankman-Fried, known in the industry as SBF, was a crypto prodigy building a digital empire that grew his net worth to $30 billion.
His fortune has largely dissipated and his crypto empire remains in shambles as Ray mounts an aggressive effort to seize the assets and return the money to creditors, who are represented by law firm Sullivan & Cromwell, and advisers from Wall Street Perella Weinberg and private equity firm Alvarez & Marsal.
In addition to its various business ventures, SBF has donated tens of millions of dollars to charities and nonprofits. He was one of President Biden’s biggest contributors to his 2020 campaign.
Investment bankers will sell off parts of the ill-fated FTX empire, including Bankman-Fried-created subsidiaries and a slew of venture capital and real estate investments.
Ray could even recoup political contributions and charitable donations, say people familiar with the matter. He is also considering restarting the FTX exchange to provide additional liquidity.