FTX Trading Ltd. and its affiliated debtors, known as the FTX Debtors, have released a second report detailing the commingling and misuse of customer deposits at FTX.com by the previous management team. The report is part of the FTX Debtors’ efforts to trace and recover assets and maximize recoveries for stakeholders. According to the report, FTX.com owes customers approximately $8.7 billion as of the petition date. The FTX Debtors have assembled a team of experts in legal, restructuring, forensic accounting, asset tracing and recovery, blockchain analytics, and other areas to carry out this work.

The full text of the report can be found on the FTX Debtors’ Kroll site. The CEO and Chief Restructuring Officer of the FTX Debtors, John J. Ray III, emphasized the importance of transparency and stated that the FTX Group’s image as a customer-focused leader was a mirage. The report exposes the commingling of customer deposits and corporate funds and their misuse by previous senior executives. The FTX Debtors are committed to providing updates on their analysis and findings as they work towards recovering as much value as possible for creditors.

This is the second report in a series that focuses on pre-petition events and issues that led to the Chapter 11 cases. The first report highlighted control failures in various areas, such as management and governance, finance and accounting, digital asset management, and information security. The FTX Debtors plan to release the third report in August 2023.

U.S. Bankruptcy Court filings and other related documents, including all reports produced by the FTX Debtors, are available on the FTX Debtors’ Kroll site.