The company tasked with locking down the assets of the failed cryptocurrency exchange FTX has said it has recovered and secured US$740 million in assets so far, a fraction of the potentially billions of US dollars likely missing from the company’s coffers.
The numbers were disclosed on Wednesday in court filings by FTX, which hired the cryptocurrency custodial company BitGo hours after FTX filed for bankruptcy on Nov. 11.
The biggest worry for many of FTX’s customers is that they could never see their money again.
FTX failed because its founder and former chief executive officer Sam Bankman-Fried and his lieutenants used customer assets to make bets in FTX’s closely-related trading firm, Alameda Research.
Bankman-Fried was reportedly looking for more than US$8 billion from new investors to repair the company’s balance sheet.
Bankman-Fried “proved that there is no such thing as a ‘safe’ conflict of interest,” BitGo chief executive officer Mike Belshe said in an e-mail.
The US$740 million figure is from Wednesday last week. BitGo has estimated that the amount of recovered and secured assets has likely risen to more than US$1 billion since then.
The assets recovered by BitGo are locked in South Dakota in what is known as “cold storage” — cryptocurrencies stored on hard drives not connected to the Internet.
BitGo provides “qualified custodian” services under South Dakota law. It is the crypto equivalent of a financial fiduciary, offering segregated accounts and other security services to lock down digital assets.
Several crypto companies have failed this year, as bitcoin and other digital currencies have collapsed in value.
FTX failed when it experienced the crypto equivalent of a bank run, and early investigations have found that FTX employees intermingled assets held for customers with assets they were investing.
“Trading, financing and custody need to be different,” Belshe said.
The assets recovered include not only bitcoin and ethereum, but also a collection of minor cryptocurrencies that vary in popularity and value, such as the Shiba Inu coin.
California-based BitGo has a history of recovering and securing assets. The company was tasked with securing assets after the cryptocurrency exchange Mt. Gox failed in 2014. It is also the custodian for the assets held by the government of El Salvador as part of that country’s experiment in using bitcoin as legal tender.
FTX is paying BitGo a US$5 million retainer and US$100,000 per month for its services.
Alibaba Group Holding Ltd (阿里巴巴) founder Jack Ma (馬雲) has been living in Tokyo for almost six months after disappearing from public view following China’s crackdown on the tech sector, the Financial Times reported yesterday, citing multiple unnamed sources. The billionaire has kept a low profile since the crackdown, which has included Chinese regulators scrapping the initial public offering of Ma’s Ant Group Co (螞蟻集團) and issuing Alibaba with record fines. However, the Times said he has spent much of the past six months with his family in Tokyo and other parts of Japan, along with visits to the US and Israel. The
‘REVOLUTION’: Elon Musk complained over a 30 percent fee Apple collects on Apple Store transactions and said the technology company has stopped advertising on Twitter Twitter Inc owner Elon Musk on Monday opened fire against Apple Inc over its tight control of what is allowed on the App Store, saying the iPhone maker has threatened to oust his recently acquired social media platform. Musk also joined the chorus crying foul over a 30 percent fee Apple collects on transactions via its App Store — the sole gateway for applications to get onto its billion-plus mobile devices. A series of Twitter posts fired off by Musk included a meme of a car with his first name on it veering onto a highway off-ramp labeled “Go to War,” instead
GLOBAL EXPANSION: The manufacturer said it increased its stake in the Chinese unit to 1.5 billion yuan and started rolling out electric Lordstown trucks at its Ohio plant Hon Hai Precision Industry Co (鴻海精密) has increased its investments in the Czech Republic and China by more than NT$6 billion (US$196 million) as part of its global expansion. The company, known as Foxconn Technology Group (富士康科技集團) internationally, has also begun shipping electric pickup trucks produced for US brand Lordstown Motors Corp. In a Taiwan Stock Exchange filing on Friday, Hon Hai said it has raised investments in its Czech subsidiary Foxteq CZ by US$58.98 million through its PCE Paragon Solutions Kft unit. In the Czech Republic, Hon Hai has a research-and-development center and a product design center, and it assembles monitors, cellphones,
‘COMPETITIVE EDGE’: The local semiconductor sector would continue to outstrip the global industry, whose revenue is expected to contract 3.6 percent, ITRI said The production value of Taiwan’s semiconductor industry would expand 6.1 percent annually to about NT$5 trillion (US$161.5 billion) next year, as demand for advanced chips used in high-performance-computing and artificial intelligence devices are less prone to mounting inflation and external uncertainties, the Industrial Technology Research Institute (ITRI, 工研院) said yesterday. That means the local semiconductor sector would continue to outstrip the global semiconductor industry, whose output is expected to contract 3.6 percent annually to US$596 billion next year, Gartner Inc has said. However, ITRI’s latest forecast represents a downgrade from its previous projection of 10 percent growth, as demand for PCs,