It's the first bankruptcy hearing for Collapsed cryptocurrency exchange Company FTX was held yesterday revealed Information on the firm's finances and Losses in the billions of dollars Lawyers for the firm say a substantial Amount of assets were either stolen or Are missing from accounts they also Disclosed cyber attacks on the company Joining us now in studio to talk more About this is Alexander syedi he is a Reporter with the Wall Street Journal Alexander welcome this is quite the Story as we were saying off camera a Moment ago the first thing I'm wondering About is what the picture actually looks Like so lawyers representing FTX say That Sam bakeman reads poor management Style has left them with little Information on the finances so what more Do we actually know about what surfaced At the first hearing what else do we Know about the former CEOs management Style So we learned a lot yesterday about what Was described as a chaotic environment That has characterized FTX mostly since The firm collapsed this month Um there proved to be very little Record-keeping no signs of corporate Governance even though FTX managed about 16 billion dollars worth of assets on Behalf of millions of customers and it Was described as a personal fiefdom to
Use the words of the lawyer of Sam Benkman freed who who founded the Company Along with a few other folks what we Know is that a lot of money and assets Occur to be stolen or missing that was The words of the company's Council Yesterday they have hired in former Investigators from the SEC and cftc Which oversees brokerages to try and Track down where that money may have Gone With cryptocurrency and FTX a lot of This is being has been done offshore and Money has moved to jurisdictions or it May be difficult to track down those Funds but they said they think they're Confident that they are going to be able To find some money but in their own Words a substantial amount of it has Been stolen or is missing so it's it's Going to be a while to find out where That money went so so then the question Of course is uh will those billions of Dollars ever be returned to investors And major firms who invested in FTS or With FTX right um no it's a good Question so what we know now is that the United States entities have located About 1.2 billion dollars in cash they Say they're confident that they'll find More however we know that the top 50 Creditors alone there are millions of Creditors but just the top 50 the
Largest 50 themselves are claiming three Billion dollars in assets they're owed So think about the 950 000 other customers who have claims Too you know how are they going to be Made whole uh running parallel to this There's actually an insolvency process Happening in the Bahamas which is where FTX had several legal entities domiciled The Bahamas thinks they actually are the Proper jurisdiction to be running the Insolvency of FTX and we know from court Papers and Regulatory documents they've In fact directed Sam bankman freed to Centralize funds into a Government-controlled wallet in the Bahamas that may be outside of the reach Of a U.S court and U.S creditors Potentially so we have also an issue of Two jurisdictions fighting over who's Really responsible to to manage the the Collapse of this company so you Mentioned creditors one key issue with The hearing was if FTX would have to Publicly disclose information about his Creditors which could include thousands Of ordinary people who use the service So do lawyers actually have an argument For not releasing the information You know yeah the FTX asked a judge to Approve a motion to keep their Information confidential saying it's you Know not right to have their names put Out in the public domain without their
Their full consent and additionally Um there's been reports of cyber attacks Happening and many cryptocurrency Customers wallets potentially releasing Personal information about them could Leave them open to cyber attacks of some Kind however the United States trustee Which is a branch of the Department of Justice Aston court yesterday that any Corporate customer that has you know Hundreds of millions of dollars of Deposits at FTX because those are also Customers there not just individuals That their names be disseminated and Made widely public in the interest of Greater transparency and the fact that They're not individuals but you know Corporations so yes so let's talk about The other sort of news that was bubbling Around this uh the director of Enforcement at the Texas state Securities board says the agency's Investigating these payments that were Made to celebrities and star athletes Who endorse FTX people like Larry David Um and others and I also note that uh Both bankman freed and one of the other Members of FTX one of the other Executives donated a lot to politicians I don't know if there's a way for those Politicians to give those assets back But what about those celebrities that Are being targeted yeah you know I think It's going to take some time for courts
To establish where the money is how much Is left to make creditors whole if There's not enough to pay them back in Their entirety are there other avenues Of recourse to find money to to pay them Back Um I we have seen that politicians who Received funds from Mr bankman freed and Also one of his deputies have started to Return funds voluntarily although I'm Sure not all have done that Um you know it's going to take some time On the private side to figure out how Celebrities and others you know may walk Back their connections to FTX but for Example let me just ask Alice before you There's a clarification right I should Make that Larry David did a commercial For them some of these others that we Put up on the graphic are individuals Celebrities who actually endorsed Uh FTX right yeah okay Um and you know the for example the uh Stadium in Miami where the Miami Heat Play the arena was rebranded to FTX Arena about Um you know a few months ago and Miami-Dade County yesterday in court Asked if they could Reject that agreement they had with FTX And change the name back so you're Seeing a lot of people really trying to Pull back any association they had with The company so I think that's gonna play
Out over the next few weeks all right Alexander saeedy thank you very much my Friend appreciate it great reporting
