FTX, the bankrupt cryptocurrency exchange, has made significant strides by recovering over $7.3 billion in both cash and crypto assets. According to the company’s attorney during yesterday’s bankruptcy court hearing, this amount has increased by more than $800 million since January.
FTX recovers billions: A surprising twist in the bankruptcy saga
The news on FTX’s asset recovery comes alongside the announcement that it is considering a Q2 relaunch. During Wednesday’s US Bankruptcy court hearing, FTX attorney Andy Dietderich stated that the company is now contemplating its future after months of effort spent gathering resources and investigating the missteps under the indicted ex-founder, Sam Bankman-Fried, who pleaded not guilty. “The situation has stabilized, and the dumpster fire is out,” Dietderich said.
FTX has experienced the benefits of the recent rise in crypto prices, Dietderich noted. The total recovery would be valued at $6.2 billion based on November 2022’s crypto prices when FTX filed for bankruptcy after traders withdrew $6 billion from the platform in three days and Binance dropped a rescue deal.
FTX contemplates Q2 relaunch amid recovery success
FTX’s new CEO, John Ray, has revealed improper fund transfers and inadequate accounting at the collapsed crypto exchange, calling it a “complete failure” of controls. As FTX looks to the future, the company is in talks with stakeholders about options for restarting the crypto exchange, and a decision may be made during the current quarter, according to Dietderich.
However, Dietderich provided few details on what a reboot might mean for FTX customers whose crypto deposits have remained locked up throughout the bankruptcy case.
To date, only FTX customers in Japan have been able to withdraw any funds, thanks to the country’s relatively robust crypto regulations, as mentioned by Dietderich.
Restarting the crypto exchange would require significant capital, as the existing customer interface had little connection to the movement of money behind the scenes. “The app worked beautifully, but in truth, it was a facade,” Dietderich said.
It remains unclear whether FTX should use its own funds to restart the exchange or repay customers. Restarting the exchange might necessitate outside funding or a sale of the exchange’s assets.
Although the recovery of funds is undoubtedly positive for former users, the news of a potential relaunch is intriguing. FTX is a name that represents a disastrous period for many investors, and the brand’s public image appears irreparably damaged. It is yet to be determined if the proposed relaunch would entail a complete rebranding.
