Bankrupt crypto exchange FTX recovered $7.3 billion in assets

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Bankrupt crypto exchange FTX has recovered more than $7.3 billion in cash and liquid crypto assets, an increase of more than $800 million since January, the firm’s attorney said Wednesday during a hearing. a hearing in US Bankruptcy Court in Delaware. FTX attorney Andy Dietderich says the company is beginning to think about its future after months of dedicated efforts to raise resources and figure out what went wrong under the charged ex-founder’s leadership. Sam Bankman-Fried. Bankman-Fried pleaded not guilty. “The situation has stabilized and the dumpster fire is out,” Dietderich said. FTX has benefited from a recent rally in crypto prices, Dietderich said. Its total recovery is said to be valued at $6.2 billion based on crypto prices from November 2022, when it filed for bankruptcy after traders withdrew $6 billion from the platform in three days and rival exchange Binance dropped a bailout deal. FTX’s new CEO, John Ray, detailed the collapsed crypto exchange’s improper fund transfers and poor accounting, describing it as a “complete failure” of controls. Looking ahead, FTX is negotiating with stakeholders on options to restart its crypto exchange, and it could make a decision on that in the current quarter, Dietderich said. He gave few details on what a reboot could mean for FTX clients whose crypto deposits have been blocked during the bankruptcy filing. So far, FTX customers in Japan have been the only ones able to withdraw funds so far, due to that country’s relatively strict crypto regulations, Dietderich said. FTX would need significant capital to restart its crypto exchange, as the existing client interface had little connection to the movement of money behind the scenes, the lawyer said. “The app worked like a charm, but in reality it was a facade,” Dietderich said. It’s unclear whether FTX should use its own funds to relaunch the exchange, rather than using the cash to reimburse customers, Dietderich said. Restarting the exchange could require outside funding or a sale of the exchange’s assets. FTX is also working on a preliminary Chapter 11 plan that would provide the company with a way out of bankruptcy, Dietderich said. FTX intends to file that plan by July, but acknowledged that many details would need to be ironed out as creditors fight for their share of the company’s assets. FTX does not expect a Chapter 11 plan to be approved until the second quarter of 2024. Bankman-Fried and several company insiders have been charged with fraud for their role in the company’s collapse. . Contrary to Bankman-Fried’s not guilty plea, former members of his entourage pleaded guilty and agreed to cooperate with prosecutors.

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