- FTX legal team has stated that the crypto firm has recovered $7.3 billion in liquid assets and may consider restarting its crypto exchange operations in Q2 2024.
- The price of the FTX token surged more than 112% after the announcement of a potential reboot of the exchange.
- Despite the collapse of FTX, some clients are still hoping for the exchange to return, stating that the underlying business, run properly, can generate returns to pay back users.
FTX, the cryptocurrency exchange that filed for Chapter 11 bankruptcy last year, may consider restarting its exchange operations sometime in the second quarter of 2024. According to the legal team representing FTX, the crypto firm has recovered roughly $7.3 billion in liquid assets. This news led to an increase in the price of the FTX token, which surged over 112% after the announcement of a potential reboot of the exchange.
FTX’s bankruptcy proceedings have been partially successful, with the new administration recovering $7.3 billion in fiat and digital assets. FTX’s new CEO, John Ray, has hinted at relaunching the crypto exchange, allowing the company to “recoup value” for their clients. However, it is still unclear whether users will be able to withdraw their money and trade with digital assets, or whether the company will attempt to become profitable to repay its debts to creditors.
Despite the collapse of FTX, some clients are still hoping for the exchange to return, stating that the underlying business, run properly, can generate returns to pay back users. Some FTX clients have been tracking the troubled exchange’s financial statements in bankruptcy court, tallying up the “reboot” meetings disclosed in lawyers’ hourly bills and documenting it all online.
FTX’s potential reboot may provide an opportunity for users to recover their assets, but it remains to be seen whether the exchange will successfully relaunch its operations and generate enough returns to repay its debts to creditors.
This is their "aspirational" yet "sensible" calendar for the debtors' plan pic.twitter.com/swqyRvTp7Q— Molly White (@molly0xFFF) April 12, 2023
The debate over whether FTX should be rebooted or permanently shuttered rages on, as creditors and industry experts weigh the value of the company against the alleged fraud that has been uncovered. While some proponents of a reboot see a path forward for a profitable business, skeptics argue that restarting FTX would be akin to the “oldest scam in crypto.”
FTX’s former CEO, Sam Bankman-Fried, is facing criminal charges for using customer funds to prop up his trading firm, making illegal political donations, bank fraud, and bribing government officials. The company itself filed for bankruptcy last fall after revealing it was short $8 billion in customer cash. Bankman-Fried has pleaded not guilty to all charges and awaits an October trial.
New FTX CEO John Ray III has not ruled out a potential reboot but has said that everything is on the table. Any restructuring plan would be subject to approval from the bankruptcy court, and it’s too early to tell whether restarting FTX would be the most valuable option, said Matthew Gold, a partner at the law firm Kleinberg, Kaplan, Wolff & Cohen.
FTX skeptics argue that rebooting the exchange would be a pipe dream and that the alleged fraud associated with the FTX brand is beyond the pale. Companies and actors that give digital assets a bad name should die and not be revived to become Frankensteins lingering around the ecosystem, said Carlos Domingo, the founder, and CEO of Securitize.
However, proponents of the reboot insist that FTX was a highly profitable exchange that was robbed by a highly unprofitable hedge fund. If the business realities support it, the planning process can move forward in a relatively straightforward way, said Joe Moldovan, a partner at the law firm Morrison Cohen.
The debate over whether to reboot FTX will continue to unfold in the coming months as the bankruptcy court weighs in on the value of the company and its potential for profitability in an increasingly strict regulatory environment.
Thanks for reading Solanews , remember to follow our social media channels for more