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Blockchain.com founder and CEO Peter Smith believes on-chain analytics will play a key role in finding missing FTX funds, but it has its limits.
On Dec. 20, Fox Business host Liz Klaman said blockchain’s selling point was to make cryptocurrency transactions transparent and traceable, telling Smith that if FTX’s customer funds were to be lost. asked what could be tracked.
Smith said that blockchain investigators have already done considerable work to track the flow of money, adding that the banking system could actually block the way.
“The hardest thing for me is [blockchain analytics] Companies working on this today, it’s time for money to move off the chain and into the banking system because it can no longer be traced.
He gave an example of when Sam Bankman-Fried or someone related to him bought a property. Once these assets leave the cryptocurrency ecosystem, it will be difficult to trace them to FTX or blockchain, he said.
Interviewers also asked whether shadow banking was used. It is a system of lenders, brokers, and other credit intermediaries that operate outside the traditional regulated banking realm and can be used to hide transactions.
co-founder and CEO @onemorepeter talked with @Liz Claman of @fox business Today we will discuss how blockchain can and cannot play a role in tracking FTX money. https://t.co/eKY6uVbnh2
Blockchain.com (@blockchain) December 21, 2022
Smith explained that on-chain analysis would be very helpful to liquidators looking to unravel the chaos of FTX, as they are records that cannot be changed or changed for funds still in the crypto ecosystem. Did.
You can track on-chain where FTX and its customers lose money, such as trading bets and liquidity farming, or withdraw funds for real estate and venture investments. It can also be used by crypto users to see how much money they have deposited into FTX, he added.
A lot of money has been lost in trading positionsreal estate, venture capital investmentsall of which occur outside of the crypto on-chain ecosystem.
In a related development, FTX’s new chief financial officer, Mary Cilia, said at a hearing on December 20 about the proceedings that the company has identified more than $1 billion in assets.
Related: SBF signs extradition papers and plans to return to US prosecution
FTX reportedly found approximately $720 million in cash assets in U.S. financial institutions authorized by the Justice Department to hold funds. Cilia said about $130 million is held in Japan, with $6 million for operating expenses. She said most of her $423 million remaining in unlicensed U.S. institutions is primarily in one of her brokers, but did not provide details.
Prosecutors and liquidators are sifting through the wreckage of FTX to try to recover up to $8 billion in missing client funds.
