In the words of James Bromley, “A substantial amount of assets have either been stolen or are missing. We are suffering from cyber attacks, both on the petition date and the days following.”
FTX's attorney, James Bromley, reported that a large portion of FTX’s assets remain unaccounted for, calling FTX’s collapse “one of the most abrupt and difficult collapses in the history of corporate America.”
In the first court hearing since FTX declared Chapter 11 bankruptcy, Bromley listed the factors that led to the exchange’s downfall. He cited that FTX was run as a “personal fiefdom” of FTX’s Ex-CEO Sam Bankman-Fried, noting
“FTX was in the control of inexperienced and unsophisticated individuals, and some or all of them were compromised individuals.”
His statements were synonymous with reports of an FTX unit buying $72M worth of condos in Albany resort as “residence for key personnel.”
Bromley also stated that FTX has been under the threat of cyber attacks ever since November 11.
The lawyer added that FTX has begun implementing measures to safeguard its clients’ assets under the leadership of John J. Ray III.
He claimed that Ray III has assembled SEC and CFTC officials to investigate FTX’s missing assets. The exchange has enlisted blockchain security firms such as Chainalysis to aid this venture.
Furthermore, FTX’s lawyers revealed that the exchange and its subsidiary firms hold $1.2B in cash, which is more than twice the amount disclosed in last week's filing.
Meanwhile, John Dorsey, the judge presiding over FTX’s bankruptcy, agreed to withhold information related to FTX’s creditors. The motion will redact clients’ name and address to maintain their anonymity.
The FTX team expects it will finish compiling FTX’s complete balance sheet by January 2023.
