In their first court appearance since filing for bankruptcy, lawyers for FTX said that a “substantial amount” of the cryptocurrency exchange’s assets “have either been stolen or are missing.”
“We have probably witnessed one of the most abrupt and difficult corporate collapses in the history of corporate America,” James Bromley, co-head of the restructuring practice at law firm Sullivan & Cromwell, said in a Wilmington, Delaware courtroom.
During the court hearing, U.S. Bankruptcy Judge John Dorsey approved motions that allow FTX to continue operating and paying employees while newly installed Chief Executive Officer John J. Ray III pores over the company’s books in search of cryptocurrencies, cash, and other assets that can be used to help repay creditors.
Asset recovery is one of the main objectives now at FTX, in addition to the implementation of controls, transparency and investigation, Bromley said at the hearing.
Bromley said the types of controls put into place at FTX include traditional market-standard accounting, audit, data management, and human resources.
The FTX team is also coordinating with regulators in the U.S. and is in frequent communication with the U.S. Justice Department, which has opened a criminal investigation into FTX’s collapse.
FTX’s top 50 creditors are owed more than $3.1 billion U.S. The judge in the case ruled that the identities of the creditors can remain secret for the time being.
