About 74% of $8.7B Owed by FTX to Customers was in Fiat and Stablecoin Funds

investopedia.com:

Bankrupt cryptocurrency exchange FTX owed $8.7 billion to its customers—approximately 74%, or $6.4 billion, of that was misappropriated fiat currency and stablecoins, according to a report released on Monday.

The report from the FTX bankruptcy team led by new CEO John J. Ray III, the second report on the exchange's financial condition since its collapse last November, now quantifies what the failed exchange owes its customers—a staggering $8.7 billion.

The investigation uncovered instances of commingling and misuse of customer deposits, with approximately $6.4 billion of the owed amount in the form of misappropriated fiat currency and stablecoins.

So far, $7 billion in liquid assets have been recovered, and efforts are underway to identify additional recoveries. However, the report also adds, «It is important to recognize that this analysis is ongoing, incomplete and subject to change.»

The report paints a damaging picture of the company's management and senior lawyers who knowingly mishandled customer funds, engaging in deceptive practices such as falsifying documents and evading detection by relocating the FTX Group across different jurisdictions.

Specifically, it disclosed that FTX Group had provided false information about the nature of related trading firm Alameda Research's bank account, which was used to process customer funds.

In a statement, Ray, leading the recovery efforts, emphasized that the image of FTX as a customer-focused industry leader was nothing more than a facade from the earliest stages.

«The FTX Senior Executives did not commingle and misuse customer deposits by accident,» Ray said in the report. «Commingling and misuse occurred at their direction, and by their design.»

The findings from the