FTX developed a line of credit to Alameda Research worth $65 billion by using a backdoor that let them borrow FTX customer funds

1/11/2023

FTX developed a line of credit to Alameda Research worth $65 billion by using a backdoor that let them borrow FTX customer funds.

This was originally reported by CoinDesk.

Recently, a Delaware Bankrupt judge also reported $5 billion total in liquid assets. New CEO John J. Ray said that customer assets of at least $8 billion remained unaccounted for.

To be clear, FTX attorney Adam Landis told the court that the $5 billion figure didn't include any crypto assets considered illiquid. The attorney argued that selling them would substantially affect the market due to the size of the now-bankrupt crypto exchange's holdings.

The $5 billion in liquid assets that were found, if sold, could potentially help repay customers who lost billions to FTX. Andrew Dietrich, another attorney for the now-bankrupt crypto exchange, said that company advisers could find crypto that would be hard to sell without majorly affecting those digital tokens' market price.

Dietrich highlighted that they are trying to sell assets with a book value of $4.6 billion, classified as "nonstrategic investments."

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