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Crypto exchange FTX has recovered more than US$5-billion in liquid assets but the extent of customer losses in its collapse is still unknown, an attorney for the bankrupt company founded by Sam Bankman-Fried said on Wednesday.

The company, which was valued a year ago at US$32-billion, filed for bankruptcy protection in November and U.S. prosecutors accused Mr. Bankman-Fried of orchestrating an “epic” fraud that may have cost investors, customers and lenders billions of dollars.

“We have located over $5-billion of cash, liquid cryptocurrency and liquid investment securities,” Andy Dietderich, an attorney for FTX, told a U.S. bankruptcy judge in Delaware at the start of Wednesday’s hearing.

Mr. Dietderich also said that the company plans to sell nonstrategic investments that had a book value of US$4.6-billion.

However, Mr. Dietderich said the legal team is still working to create accurate internal records and the actual customer shortfall remains unknown. The U.S. Commodities Futures Trading Commission has estimated missing customer funds at more than US$8-billion.

Mr. Dietderich said the US$5-billion recovered does not include assets seized by the Securities Commission of the Bahamas, where Mr. Bankman-Fried was located.

FTX’s attorney estimated the seized assets were worth as little as US$170-million while Bahamian authorities put the figure as high as US$3.5-billion. The seized assets are largely composed of FTX’s proprietary and illiquid FTT token, which is highly volatile in price, Mr. Dietderich said.

U.S. Bankruptcy Judge John Dorsey in Delaware on Wednesday granted FTX’s request to keep secret 9 million FTX customer names. But he allowed the names to remain under wrap for only three months, not six months as FTX wanted.

“The difficulty here is that I don’t know who’s a customer and who’s not,” Justice Dorsey said. He set a hearing for Jan. 20 to discuss how FTX will distinguish between customers and said he wants FTX to return in three months to give more explanation on the risk of identity theft if customer names are made public.

Media companies and the U.S. Trustee, a government bankruptcy watchdog that is part of the Department of Justice, had argued that U.S. bankruptcy law requires disclosure of creditor details to ensure transparency and fairness. FTX said disclosing customer names could allow rivals to poach users, undermining the value of the business that FTX is trying to sell.

FTX’s legal team was also seeking approval on Wednesday for procedures to sell affiliates LedgerX, Embed, FTX Japan and FTX Europe.

The affiliates are relatively independent from the broader FTX group, and each has its own segregated customer accounts and separate management teams, according to FTX court filings.

The crypto exchange has said it is not committed to selling any of the companies, but that it received dozens of unsolicited offers and plans to hold auctions beginning next month.

The U.S. Trustee has opposed selling the affiliates before the extent of the alleged FTX fraud is fully investigated.

In addition to selling affiliates, a company lawyer on Wednesday said FTX will end its seven-year sponsorship deal with the League of Legends video game, which started in 2021.

FTX’s founder, Mr. Bankman-Fried, 30, was indicted on two counts of wire fraud and six conspiracy counts last month in Manhattan federal court for allegedly stealing customer deposits to pay debts from his hedge fund, Alameda Research, and lying to equity investors about FTX’s financial condition. He has pleaded not guilty.

Mr. Bankman-Fried has acknowledged shortcomings in FTX’s risk management practices, but the one-time billionaire has said he does not believe he is criminally liable.

In addition to customer funds lost, the collapse of the company has also likely wiped out equity investors.

Some of those investors were disclosed in a Monday court filing, including American football star Tom Brady, Mr. Brady’s former wife supermodel Gisele Bundchen and New England Patriots owner Robert Kraft.

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