Bankrupt crypto exchange FTX recovers $7.3 billion in assets; considering a relaunch in Q2
Bankrupt crypto exchange FTX has recovered more than $7.3 billion in both cash and crypto assets. In addition, the total is more than $800 million since January, Reuters reported, citing the company’s attorney’s statement at a bankruptcy court hearing today.
The news comes on the heels of another report that the company is also considering relaunching the crypto exchange in Q2, FTX attorney Andy Dietderich said at Wednesday’s US Bankruptcy court hearing.
According to Dietderich, the company has begun contemplating its future following several months of dedicated efforts towards resource gathering and examining the past leadership of its disgraced founder, Sam Bankman-Fried, who has been indicted but pleaded not guilty.
“The situation has stabilized, and the dumpster fire is out,” Dietderich said.
Dietderich also added that FTX has benefited from a recent rise in crypto prices. For example, “its total recovery would be valued at $6.2 billion based on crypto prices from November 2022, when it filed for bankruptcy after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal,” Reuters reported.
FTX’s new CEO John Ray has detailed improper fund transfers and poor accounting at the collapsed crypto exchange, describing it as a “complete failure” of controls.
He also did not provide any specifics on what the relaunch might mean for existing FTX customers who have still not been able to withdraw their crypto deposits during the bankruptcy case.
So far, only FTX customers in Japan have been able to withdraw any funds so far, because of that country’s relatively strong crypto regulations, Dietderich said.
He also added that FTX would need significant capital to restart the crypto exchange because “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.
Late last year, the 30-year-old FTX founder Bankman-Fried was indicted on eight-count federal criminal charges including wire fraud and conspiracy by misusing customer funds, according to an indictment from the US Attorney of the Southern District of New York.
He could face up to 115 years in prison if convicted on all eight counts, according to congressional statutory maximum sentencing guidelines. Criminal attorneys said that SBF is at risk of spending the rest of his life in prison
Bankman-Fried first came into the spotlight in 2020 after he donated a whopping $5.2 million to Joe Biden’s campaign, making him the second-biggest donor.
Bankman-Fried founded FTX in 2019 with his co-founder Gary Wang. The Bahamas-based crypto exchange FTX offers derivatives products like futures and options as well as spot trading. Once an unknown startup, FTX has become a key player in the crypto space, rivaling the likes of Coinbase and Binance.