Is FTX Coming Back As Its Recovered Assets Surge To $7.3 Billion

On Apr 13, 2023

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According to the legal team behind the debtors, the defunct crypto exchange FTX might be returning to the crypto space. During a hearing in the United States Bankruptcy Court for the District of Delaware on April 12, the lawyers with Suvillan &Cromwell representing FTX noted that the platform had recorded roughly $7.3 billion in liquid assets. These assets include $2 billion in cash, $4.3 billion in Class A cryptocurrencies,$300 million in securities, and $600 million in investment receivables.

Notably, the March filing from the debtors revealed that the four FTX company silos had roughly $4.8 billion in scheduled assets as of November 2022—however, the crypto platform FTX might reconsider restarting the crypto exchange operations by mid-2024. Additionally, John Ray, FTX’s new Chief Executive Officer, had earlier noted that he and other executives in his new management are working to revive the platform again.

Further in the recent discussion, the FTX legal team considered a potential option to allow the platform’s creditors to convert a part of their holdings to a stake in a reopened exchange platform. However, during yesterday’s hearing at the court, the lead attorney for FTX, Andy Dietderich, asserted that restarting the exchange is among the many options the platform is weighing. Dietderich noted:

There are as many options on this, I think, as there are many professionals in the case.

Dietderich (debtor counsel) describes the first interim report filed earlier this week (thread here: https://t.co/7PgaoOfBtD).
He says the second report is underway, and will focus on failures of asset segregation.
— Molly White (@molly0xFFF) April 12, 2023

Additionally, the lead attorney noted that restarting the exchange would require a huge amount of capital. Nonetheless, there was an internal debate on whether the amount should come from FTX’s estate capital or via third-party capital. Dietderich stipulated:

There are possibilities that customers could take part of their proceeds that they would otherwise receive in cash from estate and receive some interest in the exchange going forward.

Former FTX CEO’s second chance

On the other hand, the bankruptcy judge turned down a motion that would have given the green light to the court to prioritize reimbursing SBF’s legal fees. However, Judge John Dorsey has given SBF a chance to present evidence to the court in the coming days concerning the motion, he noted:

Frankly, I have zero evidence to establish cause here. Mr. Bankman did not put out any evidence whatsoever as to balancing the equities here, what harm will occur to him. I need to find out what other insurance policies he has access to. I don’t know what other private assets he has access to that would enable him to cover these costs and recover them later under this policy.

Following the recovery of assets news, FTX’s native token, FTT, has experienced an impressive surge in price. Its price has skyrocketed from $1.32 to $2.74 after FTX revealed that it has successfully recovered $7.3B in cash and liquid assets.

However, FTT is still down 97.06% from its high record. It reached its all-time high of $84.18 in Sep 2021 but subsequently plummeted to an all-time low of $0.0827479 last December. This occurred after the FTX platform filed for bankruptcy, as its founder SBF got arrested for violations of various crimes. At press time, the FTX token (FTT) was trading at a price of $2.24 with a market cap of over $830 million.