Today in crypto, former FTX users reported receiving funds as the FTX Recovery Trust launched a new $900 million creditor payout, bringing total repayments to an estimated $11 billion. Elsewhere, Citadel reportedly acquired a large portion of Situational Awareness’ public stock portfolio following the AI-driven market sell-off, while Coinkite warned Coldcard Mk3 users to migrate funds after identifying a potential seed-generation vulnerability.
Ex-FTX users receive funds in $900 million creditor payout
Former FTX users reported receiving reimbursements on Friday as the FTX Recovery Trust began a new $900 million distribution to creditors.
Users, including former FTX customer Sunil Kavuri, said funds had started arriving through distribution partners such as Kraken after notifications were sent last week. The latest payout is the fifth distribution since FTX entered bankruptcy in 2022 and is part of a broader recovery process involving platforms including BitGo and Payoneer.
With this round, the FTX Recovery Trust is estimated to have returned roughly $11 billion to customers who lost access to their assets following the exchange’s collapse. FTX’s bankruptcy stemmed from the misuse of customer funds, leading to criminal convictions for former executives. Ex-CEO Sam Bankman-Fried and former FTX Digital Markets co-CEO Ryan Salame remain imprisoned, while former Alameda Research CEO Caroline Ellison completed her prison sentence earlier this year.
Separately, a US bankruptcy judge recently allowed the FTX estate to continue pursuing a $1.76 billion clawback claim against Binance and former CEO Changpeng Zhao, despite rejecting broader damages claims.
Citadel buys bulk of Situational Awareness stock portfolio after AI rout: Reports
Ken Griffin’s Citadel reportedly bought a large proportion of the public stock portfolio of Situational Awareness, the hedge fund founded by former OpenAI researcher Leopold Aschenbrenner.
The Financial Times first reported Thursday that Citadel bought the portfolio holdings after heavy losses during July’s artificial intelligence stock market rout.
The transaction followed Aschenbrenner’s fund falling about 67% in July, according to The Wall Street Journal, citing a person who saw a letter sent to investors. The letter said the fund remained up about 80% for the year. The Financial Times previously reported the fund was up 439% through June.
Those reports suggested Situational had approached existing investors and lenders for fresh capital and offered some investors the option to buy portfolio assets. The Journal also reported Situational needed cash to meet margin calls from its lenders and that the fund agreed late Wednesday to sell $3.5 billion of Anthropic shares to a group led by Greenoaks and Sequoia Capital before withdrawing from the deal Thursday morning.
Reuters separately reported the leveraged portfolio detail but said it could not determine whether formal margin calls had been issued before the sale. Reuters said Situational retained roughly $10 billion in stocks and private investments, including Anthropic. Situational had grown to about $24 billion in assets in under two years before the reversal, according to the FT’s follow-up profile.
Coldcard issues Mk3 warning as experts examine $38M Bitcoin wallet drain
Canadian Bitcoin hardware maker Coinkite has warned users of its Coldcard Mk3 signing device to move funds from wallets whose seed phrases were generated on affected firmware.
On Thursday, Coinkite said seeds created on an Mk3 running firmware version 4.0.1, released in March 2021, or any later Mk3 version may put funds at risk. The issue extends through version 5.0.3, the final firmware supporting the Mk3, while the Mk4, Q and Mk5 are not affected, according to the company’s early analysis.
The warning comes as Bitcoin security specialists examine an unexplained, coordinated sweep involving 594.48 BTC from single-signature addresses. However, no definitive public evidence has established that the Mk3 issue caused those transfers.
“Out of an abundance of caution,” Coinkite urged affected users to generate a new seed on an unaffected device, verify its backup and receive address, send a small test transaction and only then move the remaining funds. The company said its investigation is ongoing and promised a formal technical review.
Coinkite said its early analysis indicates that affected seeds used with a BIP-39 passphrase face minimal risk, stressing that this refers to a passphrase rather than the Coldcard PIN.
