- Bankrupt crypto exchange FTX has recovered $7.3 billion in cash and crypto assets.
- The positive development has provoked thoughts of a relaunch in Q2, 2023, FTX attorney says.
- FTX token (FTT) has reacted to the news with a 25% uptick in one hour and 103% in 24 hours.
FTX cryptocurrency exchange, now bankrupt, has hinted at a possible relaunch after recovering $7.3 billion worth of assets in both cash and crypto assets.
BANKRUPT CRYPTO EXCHANGE FTX HAS RECOVERED $7.3 BLN IN ASSETS -ATTORNEY— *Walter Bloomberg (@DeItaone) April 12, 2023
FTX WILL CONSIDER RE-STARTING IS CRYPTO EXCHANGE IN SECOND QUARTER -FTX ATTORNEY
In a Wednesday hearing at a US bankruptcy court in Delaware, FTX attorney Andy Dietderich noted that with this recovery, the shamed crypto exchange records an increase of over $800 million since January 2023.
Dietderich also revealed that the company is deliberating on its future after months of hard work trying to collect resources and establishing what went wrong under the stewardship of the since-indicted ex-founder, Sam Bankman-Fried (SBF). Notably, the former FTX executive pleaded not guilty. Citing the legal rep:
The situation has stabilized, and the dumpster fire is out.
FTX benefits from the latest bull run
Dietderich has associated the latest development in the FTX ecosystem with the recent uptick in cryptocurrency prices. Using November 2022 crypto prices or rates, the total recovery would be valued at $6.2 billion. This was when the exchange filed for Chapter 11 bankruptcy protection following traders' move to withdraw $6 billion from the platform within three days. Worse, this was around the same time when industry peer, Binance Exchange, abandoned a rescue deal to save FTX.
The current FTX CEO, John Ray, has pointed out "improper fund transfers and poor accounting" at the imploded crypto firm, calling them out for their "complete failure" of controls.
FTX to negotiate a do-over, what this would mean for exposed customers
Looking ahead, FTX is in talks with stakeholders about a possible relaunch in its crypto exchange operations. According to Dietderich, the decision could come out within between April and June 2023.
Dietderich also explained what a relaunch could mean for customers with previous exposure to FTX. Notably, many customers have their crypto deposits still locked up as the bankruptcy case continues.
Thus far, the only customers that have been able to access their funds tied to FTX are its customers in Japan. Dietderich acknowledges the country's stringent crypto regulations as the primary influencer for that outcome.
Nevertheless, FTX would require massive capital to reboot its crypto operations as the current customer interface bears little to no connection with the movement of money in the back end. He said:
The app worked beautifully, but in truth, it was a façade.
Further, Dietderich acknowledged that it remains unclear whether the exchange should use its own funds to resume operations as opposed to using the money to compensate affected customers. Restarting the exchange might require outside funding or a sale of the exchange's assets. Some community members share the sentiment.
lol what?— Wendy O (@CryptoWendyO) April 12, 2023
Should they pay everyone back first and then consider it
Regardless, it will be hard for the exchange to regain trust or its market position even if its restarts.
pay everyone back... yes absolutely...Consider restarting HECK NO and anyone dumping money into it can assume things will be different but I would never trust my money there. Voyager got me and I swore at that moment never to trust an exchange again..— Nobullshit.eth | Michaelisbored.eth | ١٧١.eth (@nobullshit_eth) April 12, 2023
The exchange is working on a preliminary Chapter 11 plan to release the company from bankruptcy. The plan will be filed by July, according to Dietderich, who highlighted many details to be addressed as creditors push for their share of the firm's assets. The plan could be approved by Q2 of 2024 at the earliest.
FTX token (FTT) reaction to the news
The hope for a possible reboot has excited FTT holders, triggering a 25% uptick following the news. At the time of writing, the token is auctioning for $2.7, up 103% in the last 24 hours.
FTT/USDT 1-day chart
Based on CoinMarketCap data, trading activity for the token is also up by an outstanding margin, recording $233.188 million, up 2,382% in the last 24 hours.
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