The failed FTX cryptocurrency exchange has recovered around US$7.3 billion in assets and is considering the option of restarting its business, said Andy Dietderich, one of the firm’s bankruptcy attorneys at Sullivan & Cromwell LL, at a court hearing on Wednesday. The price of the FTX Token (FTT) jumped nearly 110% after the hearing.
See related article: FTX’s lack of financial controls complicates bankruptcy asset recovery, says legal filing
Fast facts
- The discussion around reviving the exchange is in the early stages and any decision would not be expected until the second quarter of 2024, Dietderich said in the court hearing in Delaware. A reopened exchange may allow creditors to convert part of their holdings into actual stakes in the platform, he said.
- Following the hearing, the price of FTT surged 109% to as high as US$2.74 from around US$1.31. It stood at US$2.45 in morning trading in Asia.
- John J. Ray III, who replaced Sam Bankman-Fried as FTX’s chief executive officer on Nov. 11, said in an interview in January that the exchange could be reopened at some point.
- On Tuesday, a Swiss court granted FTX Europe AG, the holding company of FTX’s European arm, approval to sell the subsidiary. FTX Europe AG is also a debtor in the bankruptcy proceedings in the U.S.
- FTX and sister hedge fund Alameda Research filed for Chapter 11 bankruptcy protection on Nov. 11, which was followed by allegations of misappropriation of billions of dollars in client funds and other wrongdoings.
- Bankman-Fried was initially accused of eight charges including wire fraud and conspiracy to commit money laundering and could face decades in prison. He pleaded not guilty to fraud charges in January.
- U.S. federal prosecutors added four more charges against Bankman-Fried in February, accusing him of making unlawful political contributions to influence crypto regulation discussions in the country.
- On March 28, U.S. federal prosecutors added one more criminal count on Bankman-Fried, for allegedly conspiring to bribe Chinese government officials. The former FTX CEO pleaded not guilty to these five additional charges at the end of March.
- Caroline Ellison and Gary Wang, former top executives of Bankman-Fried’s cryptocurrency empire, have pleaded guilty to fraud charges related to the collapse of his companies and are cooperating with prosecutors, lawyers for the Southern District of New York said in December.
- Nishad Singh, former engineering chief of FTX, pleaded guilty to fraud and several other criminal charges in late February.
See related article: Centralized intermediaries were cause of crypto failures in 2022, says Voorhees
