(Reuters) – Bankrupt crypto exchange FTX has recovered more than $7.3 billion in cash and liquid crypto assets, up by more than $800 million since January, its lawyers said Wednesday. said at a U.S. bankruptcy court hearing in Delaware.
After months of efforts to gather resources and figure out what went wrong under the leadership of indicted former founder Sam Bankman-Fried, FTX attorney Andy Dietderich said: The company said it is starting to think about the future. Bankman-Fried has pleaded not guilty.
“The situation has stabilized and the dumpster fire has been extinguished,” said Dietrich.
According to Dietderich, FTX has benefited from the recent surge in cryptocurrency prices. Its total recovery is $6.2 billion based on crypto prices since November 2022, when traders withdrew $6 billion from the platform in three days and rival exchange Binance filed for bankruptcy after abandoning bailout trading. is evaluated.
FTX’s new CEO, John Ray, has detailed improper fund transfers and poor accounting practices at the collapsed cryptocurrency exchange, describing it as a “complete failure” of management.
Looking to the future, FTX is negotiating with stakeholders on options for reopening its cryptocurrency exchange and may make a decision this quarter, Dietrich said.
He provided few details on what the reboot means for FTX customers whose crypto deposits have been locked in a bankruptcy case.
So far, Japanese FTX customers are the only ones who have been able to withdraw funds so far due to Japan’s relatively strong crypto regulation, Dietderich said.
Lawyers said FTX would need a lot of capital to reopen the cryptocurrency exchange because its existing customer interface had little to do with how money moved behind the scenes.
“The app worked great, but it was really a sham,” says Dietrich.
Dietderich said it was not clear whether FTX should use its own funds to reopen the exchange rather than using the funds to pay back customers. Reopening the exchange may require external funding or the sale of the exchange’s assets.
FTX is also working on an interim Chapter 11 plan that will provide the company with an avenue out of bankruptcy, Dietrich said.
FTX plans to submit its plans by July, but acknowledges that many details need to be worked out as creditors vie for a share of the company’s assets. FTX does not expect its Chapter 11 plans to be approved by the second quarter of 2024.
Bankman-Fried and several insiders were charged with fraud for their involvement in the collapse of the company. In contrast to Bankman-Fried’s acquittal, former members of his entourage pleaded guilty and agreed to cooperate with prosecutors.
Reporting by Dietrich Knout Editing by Chris Reese, Alexia Garamfalvi, Anna Driver
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