A firm lawyer reportedly stated yesterday during a hearing in US Bankruptcy Court in Delaware that FTX new leadership had recovered $7.3 billion in assets and is considering whether to reopen the cryptocurrency exchange.
The $7.3 billion in cash and liquid crypto assets is a more than $800 million increase since January. Sam Bankman-Fried, the founder and former CEO of FTX, is suspected of fraudulently moving billions of dollars in customer funds to FTX’s sister business Alameda. He is charged with 13 criminal charges.
The Cryptocurrency Price Surge has Helped FTX
According to Attorney Dietderich, FTX has benefited from the recent spike in cryptocurrency prices. Its total recovery would be about $6.2 billion based on crypto values in November 2022, when it declared bankruptcy after traders withdrew $6 billion from the marketplace in three days and rival exchange Binance abandoned a rescue arrangement.
FTX’s new CEO, John Ray, described the failed crypto exchange’s unlawful fund transfers and inadequate bookkeeping as a “complete failure” of controls. Regarding options for restarting its cryptocurrency exchange, FTX is in discussions with stakeholders and could decide in the current quarter, according to Dietderich.
He did not go into much detail about what a reboot may entail for FTX customers whose crypto deposits were frozen during the bankruptcy proceedings. Due to Japan’s rather strict cryptocurrency restrictions, only FTX consumers in that nation have been able to withdraw any money thus far.
Restarting Operation in the 2nd quarter of 2024
Due to the fact that the current consumer interface had little to do with the flow of money behind the scenes, the attorney claimed that FTX would require a sizable sum of money to restart its cryptocurrency exchange.
It is unclear if FTX should use its own money to restart the exchange rather than utilize it to reimburse clients. The exchange may need outside money or the sale of exchange assets to restart.
According to CoinTelegraph, which cited remarks made by the company’s attorney at a bankruptcy court hearing, FTX will contemplate reinstating its exchange operations, which might happen around the second quarter of 2024.
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