FTX's bankruptcy Bankruptcy Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Bankruptcy or insolvency constitutes a legal term and refers to being unable to repay debts. A business and a person can declare bankruptcy. When a person or company claims bankruptcy, it is described as a voluntary bankruptcy, and when your debtors force you into bankruptcy, it is referred to as involuntary. A voluntary bankruptcy occurs when the debtor or borrower, the party that owes the money files with the courts. Involuntary bankruptcy happens when your credits file a petition with the co Read this Term team tasked with recovering customer funds released a new report yesterday (Monday) showing the collapsed cryptocurrency exchange has so far recovered $7 billion out of the $8.7 billion owed to customers.

According to the report, the extensive commingling of funds complicates the efforts to recover the remaining amount. The company's previous management had hidden its actions with the assistance of a senior attorney as early as August 2022, the team claimed.

FTX’s Alleged Misappropriations

Additionally, the report explained about $6.4 billion of the funds that FTX owed to its customers were in fiat currency and stablecoins which were reportedly misappropriated. Besides the $7 billion which has since been recovered, the bankruptcy team said it was expecting more recoveries.

The assets claimed to have been misappropriated were reportedly used for speculative trading, venture investments, and acquisitions. Moreover, the funds were used for political donations, charitable donations, and investments in luxury real estate in the Bahamas, described the report.

"Notwithstanding extensive work by experts in forensic accounting, asset tracing and recovery, and blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term analytics, among other areas, it is extremely challenging to trace substantial assets of the debtors to any particular source of funding or to differentiate between the FTX Group's operating funds and deposits made by its customers," said John Ray, the CEO of FTX who is tasked with recoveries.

The 33-page document accused FTX's top management and at least one senior attorney saying: "They lied to the banks and auditors, executed false documents, and moved the FTX Group from jurisdiction to jurisdiction, taking flight from the US to Hong Kong to the Bahamas, in a continual effort to enable and avoid detection of their wrongdoing."

FTX debtor have filed the second interim report pic.twitter.com/aEafxFTnLu

— Sunil (FTX 2.0 Champion) (@sunil_trades) June 26, 2023

'False Testimony'

Additionally, Ray's team claims that Sam Bankman-Fried gave false testimony before Congress about how his company protected customer funds. Earlier, in a separate press release, Bankman-Fried had claimed that the protection of customers was the top priority at the exchange.

The report is the second filing by Ray after disclosing accounting failures in an initial examination described inadequate management control under Bankman-Fried's watch. FTX is going through bankruptcy in Delaware, while Bankman-Fried is facing criminal charges and is expected to appear in court in October, Finance Magnates reported.