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John Ray

FTX 2.0 Now Targets $71M From SBF’s Charitable Arms

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Continuing its fund recovery policy FTX has now sought to recoup more than $71 million from the philanthropic arm and other life science entities, as the latest court documents filed on July 19 revealed. SBF-led FTX and its sister firm, Alameda, donated several million dollars to these firms for Bankman-Fried’s personal gain, according to the legal team representing the insolvent crypto exchange.

Per the petition, transfers were made to life science firms like Lumen Bioscience Inc. and Platform Life Sciences Inc. under the guise of effective altruism, a theory that advocates giving income from wealthy people to those in need. However, the firm’s lawyers argued, the philanthropic arms’ ultimate goal was not to serve the most needy.

“While purporting to make these investments for altruistic purposes (i.e., pandemic prevention and preparedness), Bankman-Fried in fact pursued these transactions because he believed that doing so would generate goodwill and amass political capital and influence for himself,” the lawyers said in the filing.

The New York Metropolitan Museum of Art reportedly agreed to return $550,000 in donations it received from FTX.

This comes after a week when the firm moved the court to get back over $323 million from the then-Swiss Company DAAG, which rebranded to FTX Europe after it was bought by the former CEO. According to the Delaware court filing dated July 13, the acquisition did not add much to the exchange’s operations beyond gaining access to European regulators through the ownership of a local entity.

FTX Releases Names Of Interested Parties

FTX CEO John Ray III, who’s overseeing the company’s restructuring, officially initiated the process of reaching out to potential bidders in the exchange’s revival.

On June 23, it published the names of parties under the 363 Sale section of the US Bankruptcy Code that allows the sale of a company’s assets. Notable names in the 363 Sales Parties include Nasdaq, Ripple Labs, Galaxy Digital, BlackRock, Tribe Capital, Robinhood, NYDIG, and OKCoin.

Previously, the defunct exchange published its second report, detailing the mishandling of customer deposits by the former management team and the staggering $8.7 billion it owed to the exchange debtors. FTX Debtors plan to conduct the sale process in Q3 or Q4 of this year and select a “stalking horse bidder.”

FTX Begins Search For Potential Buyers To Fund Its Relaunch

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FTX’s new CEO John Ray III has initiated the process of reaching out to potential participants in the exchange’s revival.

According to the report by WSJ, the bankrupt trading firm is negotiating with investors about supporting a potential reboot through setups like a joint venture, citing people familiar with the conversations.

The relaunch plan was first revealed in April by FTX lawyers after the recovery of a $7.3 billion fund.

As earlier reported, these assets included $2 billion in cash, $4.3 billion in Class A cryptocurrencies, $300 million in securities, and $600 million in investment receivables, etc.

The exchange’s lead counsel, Andy Dietderich, informed the court then that selecting this course of action would necessitate obtaining a large sum of money.

Additionally, he disclosed that there was internal disagreement within the business regarding whether the cash should come from the FTX estate or other outside sources.

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FTX Begins Search For Potential Buyers To Fund Its Relaunch 2

In May, the exchange filed avoidance actions to try and recoup about $4 billion that Genesis and non-debtor affiliates had received, so that these funds might be distributed to all other creditors of the FTX Debtors in the Chapter 11 Cases.

Then, on June 22, it requested more than $700 million from K5 Global, Mount Olympus Capital, and SGN Albany Capital, three investment companies owned by former CEO Bankman-Fried.

FTX’s New CEO Doubles Down On Transparency And Fund Recovery

Just the other day, FTX published its second report, detailing the mishandling of customer deposits by the former management team and the staggering $8.7 billion amount it owed to the exchange debtors.

The release of this report, according to John J. Ray III, who is also the Chief Restructuring Officer of FTX Debtors, is in consistent with their dedication to openness and the difficulties they have faced in their pursuit of maximum recovery.

Ray stressed their commitment to continuing their analysis and disclosing discoveries as they move forward in their efforts to preserve as much value for creditors as possible,

So far, the new management at FTX has secured almost $7 billion in assets since the bankruptcy filing, which they can utilize to reimburse consumers whose funds were frozen when the crypto exchange crashed back in Nov 2022.

FTX’s New CEO Dissociates Himself From Sam Bankman-Fried

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FTX’s current Chief Restructuring Officer John Ray who recently took control of the troubled exchange after the departure of its beleaguered founder has dissociated itself from SBF.

As stated by the exchange’s official Twitter handle, after Bankman-Fried’s resignation from FTX Official, and its, directly and indirectly, owned businesses on November 11, he no longer speaks on the behalf of the above entities.

The latest tweet follows the filing of a fresh document on Nov 14 in Delaware’s federal court, where FTX US is headquartered. The document highlighted Bankman-Fried’s stepping down and the appointment of John Jay Ray III as its new CEO.

The document also dug into Bankman-Fried’s final days as CEO of the exchange and the events that led up to the bankruptcy filings on Nov. 11.

“Questions arose about Mr. Bankman-Fried’s leadership and the handling of FTX’s complex array of assets and businesses under his direction.”

Ryne Miller, FTX US general counsel, said that in accordance with their duties specified Chapter 11 Debtors-in-Possession, both FTX US and its global platform continue to make every effort to secure all assets, wherever they may be.

Among other things, we are in the process of removing trading and withdrawal functionality and moving as many digital assets as can be identified to a new cold wallet custodian.  As widely reported, unauthorized access to certain assets has occurred.

Additionally, Miller informed that a fact assessment mitigation effort is currently underway and that they are collaborating with law enforcement and the appropriate regulators.

Meanwhile, SBF continued to draw ire for his cryptic Twitter thread that began on Nov. 14.

FTX EX CEO’s Tweets Have Gained Notoriety

With regards to his weird posts, Bankman-Fried revealed that he was “creating it up as I go” and that the series of tweets will “be more than one word.”

Bankman-Fried further blamed excess leverage for what is known as crypto’s biggest implosion since the Terra debacle. The former chief exec also stated that liquidity had been drained as a result of the market crash and bank run.

He revealed the focus now would be on raising liquidity and “make customers whole, and restart.”

Crypto Twitter remained skeptical of SBF’s pitch for securing liquidity. Some of the affected users slammed him for being in denial mode. Others accused him of running a scam when building his FTX empire.