FTX Assets Seized! Arkham: U.S. Labels $300M of Alameda as "Government Assets"

On the 8th, blockchain data analytics platform Arkham Intelligence unexpectedly announced that it had labeled the $300 million previously confiscated from Alameda Research by the U.S. government as U.S. government assets. According to Coingape, this has raised questions about how these assets will be handled in the future and their potential impact on the cryptocurrency market.

Arkham Intelligence pointed out that as part of the seizure of over $700 million in assets from FTX and Alameda, the U.S. government seized funds from three Alameda Research accounts on Binance and Binance.US in January 2023, amounting to over $300 million.

The seized assets include:

• $119.3 million in USDT
• $102.38 million in BTC and WBTC
• $28.35 million in BNB
• $26.26 million in ETH and WETH
• $13.62 million in BUSD.

The cryptocurrency exchange FTX and its associated hedge fund Alameda Research declared bankruptcy at the end of 2022, with FTX founder SBF resigning as CEO. Bankruptcy expert John J. Ray III took over to oversee FTX's liquidation, while SBF was found guilty of seven counts of fraud and conspiracy and sentenced to 25 years in prison in March this year.

The assets seized by the U.S. government may potentially be returned to victims. When U.S. District Judge Lewis Kaplan announced SBF's sentence in March, he noted that FTX customers lost $8 billion, FTX equity investors lost $1.7 billion, and Alameda Research lenders lost $1.3 billion. He enforced an $11 billion forfeiture order and authorized the U.S. government to use the seized assets to compensate the victims.

FTX's restructuring team released its latest repayment plan last month, estimating that FTX owes $11.2 billion. After liquidating assets, they expect to have between $14.5 billion and $16.3 billion in cash available for compensation, meaning the vast majority of users (those who held funds below $50,000) can receive about 118% cash compensation.

However, FTX creditors' group representative Sunil Kavuri recently opposed this repayment plan, arguing that it is not in the best interest of creditors. He believes that cash repayments would trigger tax events, causing unnecessary costs for creditors. He suggested an alternative plan of repaying assets in kind and opposed the release of funds to the debtors (FTX's bankruptcy restructuring team).

U.S. Government Holds the Highest Value of Cryptocurrencies Among Nations

According to Arkham Intelligence data, the U.S., U.K., and German governments hold the most cryptocurrencies among all governments. The U.S. government holds cryptocurrencies valued at $15.5 billion, including 217,493 bitcoins worth $15.06 billion, surpassing the 207,189 bitcoins held by global listed company Bitcoin holding leader MicroStrategy.

The U.K. government holds 61,245 bitcoins worth $4.24 billion, and the German government holds 49,858 bitcoins worth $3.45 billion. Although El Salvador was the first country to adopt Bitcoin as legal tender, it holds relatively few bitcoins, only 5,775 worth $400 million, as its bitcoins were purchased rather than seized like those held by these other countries.