FTX lawyer calls this case ‘a different sort of animal’ in first bankruptcy hearing

Sam Bankman-Fried, founder and chief executive officer of FTX Cryptocurrency Derivatives Exchange, speaks during the Institute of International Finance (IIF) annual membership meeting in Washington, DC, on Thursday, Oct. 13, 2022.

The lawyers for FTX said in the company's first bankruptcy hearing that regulators from the Bahamas have agreed to consolidate proceedings in Delaware.

Lawyers for FTX filed an emergency motion last week in order to move the company to the US.

The FTX is dealing with a different type of animal. The FTX debtors were poorly run.

An FTX attorney said that the organization was run as a personal fiefdom of Sam Bankman-Fried.

The Southern District of New York's Cyber Crimes unit is investigating the matter. Lawyers for FTX suggest there were more cyberattacks than the $477 million hack that took place shortly after the company entered Chapter 11. The attackers took ether out of the FTX wallet.

The team is trying to bring order to disorder. After introducing his fellow counsel, Bromley dove into what FTX has been doing to understand the complex morass of data and finances left behind by FTX and Bankman-Fried.

Bankman-Fried exercised a level of control over the business that no one has ever seen before.

FTX had been valued by private investors at $32 billion, and Bankman-Fried was making himself out to be an industry savior.

The FTX situation is the biggest failure in this area. The international exchange and the U.S. exchange had a run on the bank. There was a leadership crisis at the same time as the bank ran out of money. Mr. Sam-Bankman- Fried was the leader of a small group of people. The run on the bank caused Mr. Fried to lose his leadership.

The risk and data management practices are being implemented by FTX. Lawyers approved about $1 million in salary expenses for existing FTX employees.

The process is designed to maximize the amount of money for the people who owe it.

He said that it's essential to maximize the value of the assets we have. It's on the table.

Many FTX customers were located in tax havens. The largest geographical areas were included.

1. Cayman Islands — 22% of registered customers.
2. U.S. Virgin Islands — 11% of registered customers.
3. China — 8% of registered customers.

Some of the business that we understand is self-sufficient and robust will be put up for sale quickly.

FTX lawyers said they have created four different siloes for the company. They are, that's right.

• The WRS (West Realm Shires) silo, which controls and encompasses U.S. holdings.
• The Alameda silo, which includes Alameda Research, Bankman Fried’s now defunct hedge fund.
• The venture silo, which invested in crypto companies and startups.
• The dot-com silo, which encompasses the international business, the bulk of FTX’s deposits.

The asset recovery and protection efforts encompass more than just coins and dollars. Independent directors have never been brought on before.

A lot of assets have gone missing. The funds appeared to have been transferred from other silos to Alameda.

The FTT token is a coin issued by FTX. Lawyers pointed to the creation of the FTT token and the foundation of the Alameda entities in the history of FTX and affiliated companies.

Almost $300 million was spent on real estate in the Bahamas, but it was also invested in thecryptocurrencies and technology ventures. Most of the purchases were homes for senior executives.

The company's employees have left in large numbers. The FTX parent company had 330 employees around the world and 127 in the US.

FTX attorneys think the best guess is 260.

The story is evolving. You can check back for the latest news.