FTX Debtors revealed during a hearing on April 12 that the restructuring team had raised $7.3 billion in liquid assets. The exchange is currently considering relaunching, according to a lawyer representing the defunct cryptocurrency exchange. After the announcement, the FTT exchange rate increased by more than 70%, from $1.30 to $2.35 per unit.
Lawyers say FTX is considering restarting
Lawyers representing FTX debtors recently told a US bankruptcy judge that they are discussing the possibility of relaunching the exchange. Andrew Dietderich of Sullivan & Cromwell stated that there are different opinions being circulated regarding this matter. The law firm was investigating tax implications and “long-term options.” In addition, the restructuring team discovered $7.3 billion in liquid assets, and chief restructuring officer John J. Ray III and his team published a 43-page interim report.
The report outlines numerous control failures in the areas of finance, accounting, digital asset management, management, and governance. In particular, “a handful of employees, myself included, had virtually unlimited power to direct transfers of fiat currencies and crypto assets and to hire and fire employees, with no oversight or effective controls to serve as checks on how those powers were exercised.” The report also notes that FTX has failed to implement basic and widely accepted security controls to protect crypto assets.
While searching for information, FTX debtors had to examine Quickbooks records, laptops of senior officials, and Slack conversations. The report notes that some entities in the FTX Group have used Quickbooks as public ledgers. It also notes that senior FTX officials “misused and misused corporate and customer funds” and “lied to third parties.” The idea of restarting the exchange was first mentioned in January when Ray confirmed that he was open to the possibility of reviving FTX.
After news of a potential relaunch was announced, FTX cryptocurrency token, FTT, surged 70% against the US dollar from $1.30 pre-court to $2.44 per unit currently. A large number of FTT illegally launched from the title of the main publisher of FTT last year. While the bankrupt exchange holds FTT, it is very tenacious, with the top 10 wallets owning 94.19% of the circulating supply.
What do you think about the possibility of an FTX relaunch? Should the stock exchange be given a second chance or is it time to move on from FTX? Share your thoughts in the comments section below.
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