Bankrupt digital currency exchange FTX has reportedly recovered more than $7.3 billion in cash as well as liquid digital assets. This is notably an increase of over $800 million since this past January 2023. This, according to a report from Reuters which referenced the firm’s attorney (whose comments were shared on Wednesday during a US bankruptcy court hearing that took place in Delaware).
FTX’s legal representative Andy Dietderich stated that the firm is beginning to think about its future plans following several months of ongoing efforts dedicated to obtaining key resources and trying to determine what actually went wrong under the previous so-caled leadership which included indicted founder Sam Bankman-Fried.
As widely reported, Bankman-Fried has pleaded not guilty to charges.
Dietderich noted that the situation “has stabilized, and the dumpster fire is out,”
As reported by Reuters, FTX seems to have benefited from a surge in cryptocurrency prices,
The firm’s complete recovery could potentially be valued at around $6.2 billion. This is reportedy based on cryptocurrency prices dating back to November of last year, when the company filed for bankruptcy after cryptocurrency traders took out $6 billion from the exchange within a few days and competitor Binance backed out of a potential rescue move.
FTX’s current Chief Executive John Ray has commented on improper money transfers and very poor accounting practices at the failed crypto-asset platform, referring to it as a “complete failure” of controls.
As the firm makes plans for the foreseeable future, FTX is currently negotiating with various stakeholders regarding the available options for possibly re-launching its crypto business, and it could take a critical decision on that move in the present quarter, Dietderich revealed.
However, he did not provide too many details on what a re-launch could actually mean for FTX users whose crypto-asset deposits are locked up during the bankruptcy proceedings.
It’s worth noting that FTX clients residing in Japan have been able to withdraw their money , since the Asian nation’s crypto regulations provided adequate support, Dietderich claims.
Notably, FTX will be requiring considerable funding in order to reboot its exchange, since the current user interface has little connection to the movement of funds behind the scenes, the lawyer revealed.
He added that the app “worked beautifully, but in truth it was a facade.”
At present, it is not entirely clear if FTX will use its own assets in order re-start the company, instead of using the funds to repay clients, Dietderich acknowledged.
Restarting the crypto exchange could require external financing or even a potential sale of the firm’s existing assets.
At present, FTX is focused on an initial Chapter 11 plan that could provide the firm with a way out of bankruptcy, Dietderich claims.
FTX plans to file that plan later this year, however, it said that various details might have to be worked out further. This, as company creditors battle for their fair share of the exchange’s assets.
As clarified in the update, FTX does not expect any Chapter 11 plan to get approved prior to the second quarter of next year.
SBF and other company insiders have now been indicted on engaging in fraudulent activities as well as their alleged involvement in the firm’s demise.
But in sharp contrast to SBF’s not guilty plea, the other former executives have pleaded guilty and agreed to cooperate with authorities.