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

Published

3 years ago

November 22, 2022

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Lawyers for collapsed crypto exchange FTX said on Tuesday, in the company’s first bankruptcy hearing, that regulators from the Bahamas, where FTX was headquartered, have agreed to consolidate proceedings in Delaware.

FTX’s lawyers, who were brought in by new leadership to handle restructuring, filed an emergency motion last week to secure the move to the U.S. The hearing on Tuesday was the initial step in the resolution of the largest cryptocurrency bankruptcy on record.

“What we are dealing with is a different sort of animal,” said FTX counsel James Bromley. “Unfortunately, the FTX debtors were not particularly well run, and that is an understatement.”

Regarding FTX’s founder, this was an organization that was “effectively run as a personal fiefdom of Sam Bankman-Fried,” an FTX attorney told the court.

FTX lawyers confirmed earlier reports that the Southern District of New York’s Cyber Crimes unit has begun an investigation into the matter. FTX lawyers have also made reference to cyberattacks, suggesting there were multiple attacks beyond the $477 million hack that occurred shortly after the company entered bankruptcy on Nov. 11. In that attack, hackers extracted ether out of FTX wallets.

The central challenge for the new team is “working to bring order to disorder,” Bromley told the court. 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, who was replaced by restructuring expert John Ray III.

Bankman-Fried exercised a level of control over the business that “none of us have ever seen,” Bromley said, referring to the bankruptcy experts and attorneys the company has employed as part of the restucturing process.

FTX had been valued by private investors at $32 billion earlier this year, and Bankman-Fried was making himself out to be an industry savior during the crypto winter.

“The FTX situation is the latest and the largest failure in this space,” Bromley said. “There was effectively a run on the bank, both with respect to the international exchange […] as well as the U.S. exchange. At the same time that the run on the bank was occurring, there was a leadership crisis […] The FTX companies were controlled by a very small group of people, led by Mr. Sam-Bankman-Fried. During the run on the bank, Mr. Fried’s leadership frayed, and that led to resignations.”

FTX has just begun to implement “standard” risk and data management practices, he said. As part of the process, lawyers had earlier to approve roughly $1 million in salary expenses for existing FTX employees.

The process is designed to get as much as possible for creditors, Bromley said.

“It is essential that we first maximize the value of the assets we have, whether that means selling assets, selling businesses or restructuring businesses,” he said. “All of that is on the table.”

FTX customers had a global presence, but many were based in tax havens. The largest geographic areas represented included:

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

“We will be before you quite quickly with an attempt to sell certain of the business that we understand […] are self-sufficient and robust [with] interest from others,” Bromley added.

FTX lawyers said they’ve established four silos for the company’s assets and various entities. They are:

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.

Bromley said the asset recovery and protection efforts encompass not just crypto assets and currency, but “information.” The company has also brought on independent directors for the first time ever.

“A substantial amount of assets have either been stolen or missing,” Bromley said. “Additionally, “substantial funds appear to have been transfered from other silos to Alameda.”

A key aspect of the FTX crisis is around Alameda and the FTT token, a coin issued by FTX. Lawyers have walked through the history of FTX and affiliated companies, pointing at the creation of the FTT token in April 2019 and the foundation of the Alameda entities in November 2017.

Investments were made in the crypto and technology venture space, Bromley said, but almost $300 million was also spent on real estate in the Bahamas. That number is higher than previously reported, and Bromley said most of those purchases were home and vacation properties for senior executives.

Employees have left the company in droves. As of October 2022, the main FTX parent company had 330 employees around the world, with 127 in the U.S. Including the Australian businesses and FTX Digital Markets which had 190 employees, the global headcount was 520.

The best guess for the headcount now, according to FTX attorneys, is “around 260.”

This is a developing story. Please check back for updates.

Technology

We’re raising our CrowdStrike price target following a beat and raise quarter

Published

5 hours ago

December 3, 2025

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We're raising our CrowdStrike price target following a beat and raise quarter

Technology

Okta shares fall as company declines to give guidance for next fiscal year

Published

7 hours ago

December 2, 2025

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Okta shares fall as company declines to give guidance for next fiscal year

Cheng Xin | Getty Images

Okta on Tuesday topped Wall Street’s third-quarter estimates and issued an upbeat outlook, but shares fell as the company did not provide guidance for fiscal 2027.

Shares of the identity management provider fell more than 3% in after-hours trading on Tuesday.

Here’s how the company did versus LSEG estimates:

Earnings per share: 82 cents adjusted vs. 76 cents expected
Revenue: $742 million vs. $730 million expected

Compared to previous third-quarter reports, Okta refrained from offering preliminary guidance for the upcoming fiscal year. Finance chief Brett Tighe cited seasonality in the fourth quarter, and said providing guidance would require “some conservatism.”

Okta released a capability that allows businesses to build AI agents and automate tasks during the third quarter.

CEO Todd McKinnon told CNBC that upside from AI agents haven’t been fully baked into results and could exceed Okta’s core total addressable market over the next five years.

“It’s not in the results yet, but we’re investing, and we’re capitalizing on the opportunity like it will be a big part of the future,” he said in a Tuesday interview.

Revenues increased almost 12% from $665 million in the year-ago period. Net income increased 169% to $43 million, or 24 cents per share, from $16 million, or breakeven, a year ago. Subscription revenues grew 11% to $724 million, ahead of a $715 million estimate.

For the current quarter, the cybersecurity company expects revenues between $748 million and $750 million and adjusted earnings of 84 cents to 85 cents per share. Analysts forecast $738 million in revenues and EPS of 84 cents for the fourth quarter.

Returning performance obligations, or the company’s subscription backlog, rose 17% from a year ago to $4.29 billion and surpassed a $4.17 billion estimate from StreetAccount.

This year has been a blockbuster period for cybersecurity companies, with major acquisition deals from the likes of Palo Alto Networks and Google and a raft of new initial public offerings from the sector.

Okta shares have gained about 4% this year.

WATCH: Earnings will drive small cap outperformance, says Bank of America’s Jill Carey Hall

Technology

Marvell to acquire Celestial AI for as much as $5.5 billion

Published

8 hours ago

December 2, 2025

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Marvell to acquire Celestial AI for as much as .5 billion

Marvell Technology Group Ltd. headquarters in Santa Clara, California, on Sept. 6, 2024.

David Paul Morris | Bloomberg | Getty Images

Semiconductor company Marvell on Tuesday announced that it will acquire Celestial AI for at least $3.25 billion in cash and stock.

The purchase price could increase to $5.5 billion if Celestial hits revenue milestones, Marvell said.

Marvell shares rose 13% in extended trading Tuesday as the company reported third-quarter earnings that beat expectations and said on the earnings call that it expected data center revenue to rise 25% next year.

The deal is an aggressive move for Marvell to acquire complimentary technology to its semiconductor networking business. The addition of Celestial could enable Marvell to sell more chips and parts to companies that are currently committing to spend hundreds of billions of dollars on infrastructure for AI.

Marvell stock is down 18% so far in 2025 even as semiconductor rivals like Broadcom have seen big valuation increases driven by excitement around artificial intelligence.

Celestial is a startup focused on developing optical interconnect hardware, which it calls a “photonic fabric,” to connect high-performance computers. Celestial was reportedly valued at $2.5 billion in March in a funding round, and Intel CEO Lip-Bu Tan joined the startup’s board in January.

Optical connections are becoming increasingly important because the most advanced AI systems need those parts tie together dozens or hundreds of chips so they can work as one to train and run the biggest large-language models.

Currently, many AI chip connections are done using copper wires, but newer systems are increasingly using optical connections because they can transfer more data faster and enable physically longer cables. Optical connections also cost more.

“This builds on our technology leadership, broadens our addressable market in scale-up connectivity, and accelerates our roadmap to deliver the industry’s most complete connectivity platform for AI and cloud customers,” Marvell CEO Matt Murphy said in a statement.

Marvell said that the first application of Celestial technology would be to connect a system based on “large XPUs,” which are custom AI chips usually made by the companies investing billions in AI infrastructure.

On Tuesday, the company said that it could even integrate Celestial’s optical technology into custom chips, and based on customer traction, the startup’s technology would soon be integrated into custom AI chips and related parts called switches.

Amazon Web Services Vice President Dave Brown said in a statement that Marvell’s acquisition of Celestial will “help further accelerate optical scale-up innovation for next-generation AI deployments.”

The maximum payout for the deal will be triggered if Celestial can record $2 billion in cumulative revenue by the end of fiscal 2029. The deal is expected to close early next year.

In its third-quarter earnings on Tuesday, Marvell earnings of 76 cents per share on $2.08 billion in sales, versus LSEG expectations of 73 cents on $2.07 billion in sales. Marvell said that it expects fourth-quarter revenue to be $2.2 billion, slightly higher than LSEG’s forecast of $2.18 billion.

WATCH: Nvidia GPUs to Google TPUs: Breaking down all the AI chips