OKX, one of the biggest cryptocurrency exchanges, has revealed that it has found $157 million in digital assets belonging to FTX and Alameda Research and will give them over to the former businesses’ bankruptcy estates. The exchange did not disclose which digital assets it had discovered, but this step is anticipated to bring some comfort to FTX creditors and investors after the exchange went bankrupt in November 2022.
Following the demise of FTX, OKX started an inquiry to discover any FTX-related transactions on its exchange. OKX moved to secure the funds and freeze the relevant accounts after uncovering assets and accounts linked to FTX and Alameda Research. OKX’s move is considered as a positive step toward recouping some of the losses experienced by FTX’s investors and creditors.
Following FTX’s demise, a big theft occurred in which a hacker stole $600 million from its wallets. This raised concerns that FTX accounts on other exchanges had been compromised, compounding investors’ and creditors’ losses. According to the bankruptcy attorneys handling the matter, FTX has a “severe shortage” in assets, with only $694 million in the most liquid “Category A Assets,” which include fiat, stablecoins, bitcoin, BNB, SOL, and ether.
OKX’s decision to identify and turn over digital assets to the bankruptcy estate is likely to be seen positively in terms of recouping some of the losses sustained by FTX investors and creditors. Yet, it is unclear whether this will be sufficient to address the “huge shortfall” in assets.
This case shows the risks and difficulty of investing in cryptocurrencies, as well as the importance of strong security measures and legislation to safeguard investors and prevent fraud and theft. It also emphasizes the significance of conducting thorough research and cautious deliberation before investing in any cryptocurrency or digital asset.