--- title: "What happened to FTX.com customers' assets" language: en canonical: https://dossiertwist.com/dossiers/ftx-trading-ltd/customer-assets/ as_of: 2026-10-21 keywords: ["FTX Trading Ltd","FTX.com","FTX Trading Limited","Sam Bankman-Fried","Alameda Research","Paper Bird Inc.","Dotcom Silo","FTX Digital Markets","FTX Europe AG","FTX EU Ltd","FTX Japan","West Realm Shires","FTT","Chapter 11","FTX Recovery Trust","John J. Ray III","Caroline Ellison","Gary Wang","Nishad Singh","CFTC consent order"] --- # What happened to FTX.com customers' assets **Question.** What did FTX promise its customers, where did their money go, and how much was missing? **Answer.** FTX's terms of service told customers that their digital assets remained theirs and would not be lent to FTX Trading, and FTX called itself "the safest and easiest way to buy and sell crypto"; the consent order in the CFTC case, entered with FTX Trading's and Alameda's consent, found that customer funds were in fact commingled and misappropriated. Customer deposits ran through bank accounts of Alameda, North Dimension, FTX Digital Markets and FTX Trading, all mixed with corporate money, and records were sparse. The debtors estimate that about $8.7 billion of FTX.com customer assets had been misappropriated by the petition date. After a petition-date hack and a recovery effort, an October 2023 settlement gave FTX.com customers a shortfall claim estimated at about $8.9 billion, and the CFTC order requires FTX Trading and Alameda to pay $8.7 billion in restitution through the bankruptcy distributions. ## What customers were told - Analysis: As quoted in the SEC's complaint, FTX's public terms of service told customers that "you control the Digital Assets held in your Account", that title "shall at all times remain with you and shall not transfer to FTX" and that none of the assets in an account "are the property of, or shall or may be loaned to, FTX Trading"; fiat currency was represented as electronic money that customers could redeem at any time. The debtors' second interim report notes that the terms said nothing about what FTX Trading Ltd. would do with customers' fiat and did not promise to segregate it, although the group publicly claimed to protect customer deposits; the terms for customers in Japan, by contrast, said fiat was held in a segregated trust. The CFTC's consent order, entered with the companies' consent without a trial on the merits and with its findings admitted only for limited purposes, reads the terms differently: it finds that section 8.2.6 of FTX Trading's terms of service prohibited Alameda's use of customer fiat and digital assets. [src-023] [src-036] [src-027] - Analysis: Announcing the consent order on 8 August 2024, which FTX Trading Ltd. and Alameda accepted without a trial on the merits, the CFTC said the court had found that FTX Trading Ltd. and Alameda Research LLC made material misrepresentations to customers: FTX called itself "the safest and easiest way to buy and sell crypto" and said customer assets were held in "custody" and segregated from its own, when in fact customer funds were commingled and misappropriated. The debtors' report says that, as local regulation required, the group did segregate customer funds in Japan, Cyprus and Singapore, and its findings exclude those jurisdictions and FTX US; for Cyprus, the disclosure statement later reports that FTX EU Ltd was found not to hold enough segregated assets to meet its customer obligations. [src-028] [src-036] [src-068] ## Where the money went, and the missing records - Analysis: Besides the main deposit accounts of Alameda Research Ltd. and North Dimension Inc., the debtors' second interim report lists accounts in the names of FTX Digital Markets Ltd., FTX Trading Ltd. (three of them labelled internally as held for the benefit of customers, although the report elsewhere describes one of the three, FTX Trading-9964(S), as designated internally as corporate while in fact receiving customer deposits) and Alameda Research Ltd. through which customer deposits and withdrawals passed, and says customer and corporate funds were commingled in all of them. FTX Digital Markets' liquidators reported in February 2023 that FTX.com customers were not booked to any particular company, so which company owes what to which customers is an open legal question; customer funds appear to have been pooled regardless of jurisdiction, and accounts of different FTX companies were used interchangeably. [src-036] [src-008] - Analysis: The debtors' first interim report describes a pervasive lack of records showing where cash and digital assets could be found: 56 group companies produced no financial statements of any kind and 35 used QuickBooks, transfers among companies were not properly documented, approvals for transfers of tens of millions of dollars were given in Slack, Signal or Telegram, sometimes with disappearing messages, and expenses were approved by emoji. The global notes to the debtors' schedules add that substantial assets went to related parties and insiders, many apparently undocumented, and that undocumented cash transfers to insiders were classified as interest-free notes receivable. The Dotcom Silo's last unaudited balance sheet, as of 30 September 2022, showed total assets of $2.25 billion and did not record customer crypto assets; Ray said he had no confidence in it, and that the silo's 2021 statements had been audited by Prager Metis, a firm he was not familiar with. [src-025] [src-011] [src-001] - Analysis: The debtors' first interim report also describes custody failures: outside Japan, where regulation required cold storage, the group made little use of it, although employees said in October 2022 that holdings were mostly cold; private keys and seed phrases of FTX.com, FTX US and Alameda were stored insecurely, including keys to more than $100 million of Ethereum assets in plain text on a server; virtually all FTX.com bitcoin sat in a single wallet node; and the exchanges and Alameda shared a single AWS account. [src-025] ## The shortfall - Analysis: The debtors' second interim report (June 2023) estimated that about $8.7 billion of customer-deposited assets had been misappropriated from FTX.com by the petition date, mostly cash and stablecoins, of which more than $6.4 billion was fiat and stablecoin. The disclosure statement of May 2024 adds that more than $10 billion had been misappropriated at points in 2022, that internal documents suggest a cash deficit of over $10 billion in March 2022, and that shortly after the petition date the exchange owed customers about $9.2 billion it did not have. These are the debtors' estimates, made after they took control of FTX Trading Ltd.; the $6.4 billion figure excludes Alameda's balances on the FTX US, Japan, Singapore and Cyprus exchanges, and the estimates changed as the analysis progressed. Before the collapse, on or about 7 November 2022, Bankman-Fried had posted that "FTX is fine. Assets are fine" and that FTX could cover all client holdings, a statement the SEC calls false and misleading and which he later deleted. The CFTC's consent order of August 2024 requires FTX Trading Ltd. and Alameda Research LLC to pay, jointly and severally, $8.7 billion in restitution, to be satisfied through distributions under the Chapter 11 plan. [src-036] [src-068] [src-027] [src-023] - Analysis: By August 2022, the debtors' report says, the FTX senior executives and Caroline Ellison privately estimated that FTX.com owed customers more than $8 billion in fiat it did not have, did not disclose it, and recorded it in a customer account referred to as "our Korean friend's account", showing the "friend" as owing the exchange $8.9 billion; the report calls the account a sham, and the CFTC order separately finds that Alameda's dollar liability was moved into it. At the petition date, according to the debtors' first-day presentation, 94% of Dotcom Silo customers were customers of FTX Trading Ltd. and 6% of FTX Digital Markets Ltd., a split that FTX Digital Markets' liquidators disputed, arguing that many FTX.com customers had been moved to FTX Digital Markets from May 2022; that dispute was later settled. [src-036] [src-012] - Analysis: Little cash remained. Ray's first-day declaration tabulates FTX Trading Ltd.'s cash at the petition date at $2,976,050, of which $2,600,324 custodial, against $49,352,327 at FTX EU Ltd and $49,999,600 of restricted cash at the non-debtor FTX Digital Markets; debtor companies held $169.8 million in all and non-debtors $394.6 million. The first-day presentation counted $33.7 million of substantiated unrestricted cash at U.S. institutions for the Dotcom Silo as of 18 November 2022. [src-001] [src-012] ## The petition-date hack and the transfers to Bahamian custody - Analysis: Assets also left on and around the petition date, and the amounts are given differently: Ray recorded at least $372 million of unauthorized transfers on the petition date and the minting of about $300 million of FTT; the debtors later referred to a cyberattack draining about $432 million, and in December 2023 to at least $433 million; FTX Digital Markets' liquidators reported a hack of the international platform around 12 November 2022 that removed $323 million, with its split between FTX Digital Markets and FTX Trading unknown. The figures come from different parties at different times and are not reconciled. [src-001] [src-025] [src-008] [src-009] - Analysis: The debtors' first interim report states that the day after the breach, at the direction of Bahamian authorities and without the debtors' authorization, Bankman-Fried and/or Wang moved hundreds of millions of dollars of FTT, SRM, MAPS and other tokens from debtor wallets into cold wallets in Bahamian custody; a December 2023 filing says the Securities Commission of the Bahamas coordinated with them on 12 November 2022 to move 195 million FTT into wallets it controlled. The report does not say which debtor owned the wallets. FTX Digital Markets' liquidators give a different account: after a Bahamian court order of 12 November 2022 authorised the Commission to instruct FTX Digital Markets, the Commission directed Bankman-Fried and Wang to move the remaining assets under FTX Digital Markets' control to wallets it had set up. Whose assets these were became part of the dispute between the two estates, which they addressed in the global settlement announced on 19 December 2023. The only data on the international platform's holdings the liquidators had were schedules provided by Bankman-Fried on 11 November and by Wang to the Commission on 13 November 2022, neither explained. [src-025] [src-009] [src-008] [src-056] - Analysis: In the debtors' account, Ellison also began dissipating estate assets on 9 November 2022 through attempted transactions with LayerZero, ultimately agreeing to transfer equity and warrants worth far more than the $45 million loan they purported to release, and the same day purported to give BlockFi International security pledges of hundreds of millions of dollars. The debtors sued LayerZero Labs and others (Adv. Pro. No. 23-50492) to recover the assets and about $41 million of preferential transfers; the defendants answered, and in May 2024 discovery was continuing. No response by Ellison to this description was retained. [src-009] [src-068] [src-073] - Attributed: According to the debtors' December 2023 filing, on 9 November 2022 Caroline Ellison began dissipating estate assets through attempted transactions with LayerZero, ultimately agreeing to transfer equity and warrants worth far more than the $45 million loan they purported to release, and the same day purported to give BlockFi International security pledges of hundreds of millions of dollars. [src-009] [src-068] [src-073] - Qualification: This is the debtors' characterization in litigation; the retained record does not include the underlying agreements or a response by Ellison to this description, and it does not name the Alameda entity that held the assets. - Outcome: The debtors sued LayerZero Labs, Ltd. and others (Adv. Pro. No. 23-50492) to recover the assets transferred in what they called fire-sale transactions negotiated on the eve of the Chapter 11 cases, and about $41 million of preferential transfers; the defendants answered the complaint without moving to dismiss it, and the May 2024 disclosure statement reports discovery as ongoing. ## Recoveries and the customer settlement - Analysis: By April 2023 the debtors had recovered and secured more than $1.4 billion of digital assets in cold storage and identified a further $1.7 billion, including more than $140 million found by code that scanned more than 10 million customer wallets; by June 2023 they reported about $7 billion of recovered liquid assets, and by September 2023 about $7 billion of distributable value against more than about $16 billion of customer claims. On 16 October 2023 FTX Trading Ltd. and the other debtors announced a settlement with representatives of non-U.S. customers, the creditors' committee and class representatives of the dispute over whether customers owned the exchange assets: assets would be split into pools for FTX.com customers, FTX US customers and a general pool, customers would hold a "Shortfall Claim" estimated at about $8.9 billion for FTX.com and $166 million for FTX US, and 66% of the general pool would go to those shortfall claims alone. [src-025] [src-036] [src-009] [src-037] ## Sources - [src-023] Complaint, SEC v. Caroline Ellison and Zixiao "Gary" Wang, No. 1:22-cv-10794 (S.D.N.Y.), U.S. Securities and Exchange Commission, 2022-12-21 - [src-036] Court record source · src-036 - [src-027] Consent order of permanent injunction against FTX Trading Ltd. and Alameda Research LLC, CFTC v. Bankman-Fried et al., No. 1:22-cv-10503 (S.D.N.Y.), U.S. Commodity Futures Trading Commission, 2024-08-07 - [src-028] CFTC release: court orders FTX and Alameda to pay $12.7 billion, U.S. Commodity Futures Trading Commission, 2024-08-08 - [src-068] Court record source · src-068 - [src-008] Court record source · src-008 - [src-025] Court record source · src-025 - [src-011] Court record source · src-011 - [src-001] Court record source · src-001 - [src-012] Court record source · src-012 - [src-009] Court record source · src-009 - [src-056] Company statement source · src-056 - [src-073] Court record source · src-073 - [src-037] Company statement source · src-037