At a U.S. bankruptcy court hearing in Delaware, FTX’s attorney announced that the bankrupt crypto exchange has recovered over $7.3 billion in cash and liquid crypto assets, which is $800 million more than what it had in January.
FTX is now considering its future plans after months of collecting resources and investigating what led to its downfall under the ex-founder, Sam Bankman-Fried, who has pleaded not guilty to the charges against him. FTX’s attorney stated that the situation has stabilized, and the company is no longer in a “dumpster fire” state.
Due to a recent rise in crypto prices, FTX has benefited, and the total recovery is estimated at $6.2 billion based on crypto prices from November 2022 when the platform filed for bankruptcy. The collapsed crypto exchange’s new CEO, John Ray, has revealed the improper fund transfers and poor accounting that led to the “complete failure” of controls.
FTX is in negotiations with stakeholders about the options for restarting its crypto exchange and might decide on that in the current quarter. However, FTX customers whose crypto deposits were locked up during the bankruptcy case are still unsure of what a reboot might mean for them.
The lawyer stated that FTX would require significant capital to restart its crypto exchange, as the customer interface had little connection to the movement of money behind the scenes. It is unclear whether FTX should use its funds to restart the exchange or repay customers. Restarting the exchange might require outside funding or a sale of the exchange’s assets.
FTX is also working on a preliminary Chapter 11 plan to offer the company a path out of bankruptcy. However, FTX does not expect any Chapter 11 plan to be approved before the second quarter of 2024, and many details still need to be worked out as creditors fight for their share of the company’s assets.
Bankman-Fried and several company insiders have been indicted on fraud charges for their roles in the company’s collapse. While Bankman-Fried has pleaded not guilty, former members of his inner circle have pleaded guilty and agreed to cooperate with prosecutors.
