FTX recovers $7 billion under new leadership.

The new leadership team at FTX has recovered approximately $7 billion in liquid assets as the exchange continues its recovery efforts.

The company has announced that it has made significant progress in securing assets, having recovered up to $7 billion in liquid assets to date.

According to a second report released on Monday by the company’s debtors, the exchange owed its customers around $8.7 billion when it went bankrupt last year.

The report stated that FTX had a deficit of $6.4 billion in fiat currency and stablecoin that had been misappropriated.

The announcement comes as the company is working to recover all the money it can.

Last week, FTX filed a complaint in Wilmington, Delaware, bankruptcy court, seeking the return of the $700 million transferred by its founder, Sam Bankman-Fried, to K5 entities in 2022.

The exchange claimed that Bankman-Fried was a “profligate patron” who had sent millions to K5 Global and affiliated entities and K5 Global co-owners, Michael Kives and Bryan Baum, following a social event hosted by Kives in 2022.

FTX has sought the return of funds, describing the transfers as being carried out “without receiving equivalent value” and, more importantly, avoidable, meaning that they can be reversed under the Bankruptcy Code or other laws.

FTX’s bankers are also looking to sell their stake in AI startup Anthropic in another attempt to raise funds for users.

Perella Weinberg, the boutique bank overseeing FTX’s bankruptcy proceedings, is reportedly discussing the potential sale of Anthropic’s stake with interested parties.

Meanwhile, the bankrupt crypto exchange is facing rising legal and advisory costs.

According to filings submitted by the exchange’s bankruptcy advisors, the advisors have billed the company a staggering $121.8 million in fees and expenses for the period between February 1 and April 30.

FTX Misused and Commingled Customer Funds

In their latest report, the FTX debtors reiterated the commingling and misuse of customer deposits at FTX by the company’s previous management team.

“From the inception of the FTX.com exchange, the FTX Group commingled customer deposits and corporate funds, and misused them with abandon at the direction and by the design of previous senior executives,” John J. Ray III, the new CEO of FTX, said in a comment.

The new report comes after an earlier report by debtors of the platform discussed control failures by FTX and its group of companies in key areas, including management and governance, finance and accounting, information security, and cybersecurity.

Despite controlling tens of billions of dollars of assets across its various companies and operating in 250 jurisdictions, FTX Global “lacked fundamental financial and accounting controls,” the previous report said.

It further claimed that FTX Global had poor or near-nonexistent digital asset management, information security, and cybersecurity controls, which exposed crypto assets under its control to a grave risk of loss, misuse, and compromise.

The report also alleged that FTX had “no dedicated personnel” in cybersecurity, leaving such matters in the hands of Nishad Singh and Gary Wang, who lacked the experience and training to handle the firm’s complex cybersecurity needs.